|No wonder Ecclestone has been in a good mood. This trial is just free PR for F1. Think about it, every year there is some big controversy that brings F1 free PR. Hmm…….|
German prosecutors have made the stunning revelation that they believe Bernie Ecclestone was blackmailed by a former banker who received Â£26m ($44m) from the Formula One boss according to an article in the Daily Mail by Christian Sylt.
For the past three years Ecclestone's legal situation has hung over F1 like a dark cloud. In January 2011 former banker Gerhard Gribkowsky was arrested in Germany for receiving Â£26m from Ecclestone and his family's Bambino trust. The prosecutors soon revealed that they believe the payment was a bribe so that Gribkowsky would steer the sale of F1 in 2005 to Ecclestone's preferred buyer.
Two years ago Gribkowsky was convicted for receiving the alleged bribe and Ecclestone is now on trial for paying it. He revealed his defense for the first time in 2011 when he told Sylt that the money was paid because Gribkowsky was blackmailing him.
The claim was rubbished by the prosecutors and media alike with many observers failing to believe that Ecclestone could be put under so much pressure that he would pay someone millions. However, here we are three years down the line and it has finally come out that the Â£26m did indeed change hands because Ecclestone was being blackmailed. Remarkably the revelation comes from none other than the very same prosecutors who claim that the payment was a bribe.
The remarkable revelation gives perhaps the biggest boost to Ecclestone's chances in the bribery trial, which is just what he needs as he could be imprisoned for up to ten years if he loses.
The prosecutors haven't exactly shouted from the hills that they admit Ecclestone was blackmailed into handing over the money. Instead, the claim is buried deep in the 256-page indictment against him which Sylt has gone through with a fine tooth comb. To understand the prosecutors' revelation we need to start right at the beginning.
Gribkowsky was in charge of selling a 47.2% stake in F1 which was owned by his employer, the German bank BayernLB. In 2005 it was sold to the sport's current owner, the private equity firm CVC. Bambino sold its shares to CVC at the same time and F1's remaining owners – two banks JP Morgan and Lehman Brothers – soon followed suit.
Over the two years after the sale Ecclestone and Bambino paid Gribkowsky a total of Â£26m and BayernLB knew nothing about it. When German prosecutors found out about the payment in 2011 they arrested Gribkowsky because they thought it was a bribe for agreeing to sell BayernLB's F1 stake to CVC. The reason they thought that Ecclestone favored CVC is that it had agreed to keep him on as the boss of F1. In contrast, according to the prosecutors, Ecclestone wanted rid of the banks because they posed a threat.
In 2005 the banks sued Ecclestone in London for personally taking control of F1's key operating company Formula One Administration (FOA). The previous year they had won a similar case against Bambino for seizing control of FOA's parent company Formula One Holdings (FOH) and Ecclestone too eventually gave in to the banks by settling the lawsuit.
He denies bribing Gribkowsky so that he would steer the sale of F1 to CVC. Instead, he says that Gribkowsky threatened to tell the UK's tax authority, the Inland Revenue, that he controlled Bambino if the Â£26m was not paid. Bambino has raised Â£2.4bn from selling stakes in F1 but no tax has been paid on the money as the trust is located offshore.
In contrast, Ecclestone is a UK taxpayer so if he was found to be connected to the trust he would have to pay 40% tax on its assets. Ecclestone says he was not the settlor of the trust, as it was set up by his ex-wife who is also a beneficiary along with their two daughters. Ecclestone is neither a beneficiary nor a trustee of Bambino but he says that he paid Gribkowsky even though his allegations were unfounded because if they had been reported to the Inland Revenue it would have triggered a lengthy and costly investigation.
Surprisingly, although the prosecutors claim that Ecclestone paid a bribe they admit that Gribkowsky blackmailed him about being connected to Bambino in order to get the money.
According to the indictment, the blackmail began when the banks were suing him. "Insinuations that Bernard Ecclestone was the ‘settlor' of the trust were made to Ecclestone and Bambino by the convicted Dr Gribkowsky especially during the litigation in Britain (FOA and FOH lawsuits). It was a strategy of BayernLB to put the Accused under pressure in the context of the civil litigation." More of this interesting story at Pitpass.com