Ecclestone accused of bribery by German prosecutors

Bernie Ecclestone in hot water?

German prosecutors have alleged for the first time that Bernie Ecclestone and a trust belonging to the head of Formula One's family paid almost $44m (£27m) in bribes to a German banker.

In return, they allege, Ecclestone received $41.4m in commissions from BayernLB, the German bank, while a family trust company was paid $25m.

State prosecutors in Munich said on Tuesday they had charged Gerhard Gribkowsky, the German banker who organized BayernLB's sale of a stake in F1 in 2005, with breach of trust and tax evasion as well as having been in receipt of corrupt payments, the Financial Times reported. Gribkowsky, the former chief risk officer at the Munich-based bank, was arrested in January.

Prosecutors told the Financial Times that Ecclestone, who was not available for comment, remains under investigation in connection with allegations of bribery and abetting breach of trust. Ecclestone, who leases the commercial rights to Formula One with his associates from the FIA, the ruling body, has given evidence to the prosecutors and said he expects to be cleared of wrongdoing. He has not yet publicly explained his involvement in the BayernLB sale or his dealings with Gribkowsky.

There is speculation over a possible sale of F1 by CVC Capital Partners, the private equity group that bought the motor sport in 2005 from BayernLB for $1.7bn, with Rupert Murdoch's News Corp interested. CVC has said it has no knowledge of any payments to Mr. Gribkowsky in connection with its purchase of F1. It was alleged that an internal CVC investigation uncovered payments by BayernLB to Ecclestone and a foundation linked to him, Bambino Trust. Prosecutors allege Gribkowsky set up and controlled two Austrian companies that received almost $44m from someone they name as "Bernard E" and an entity of the Bambino Trust.

"According to the results of investigations this is bribery money, whose payment was disguised through two fake consulting contracts with [companies] in Mauritius and the British Virgin Islands," a statement from prosecutors said.

The prosecutors said that to compensate for these payments, Gribkowsky agreed to pay $41.4m to Ecclestone on behalf of BayernLB, as well as $25m to Bambino. "The Bayerische Landesbank incurred damages of almost $66.5m through the conduct of the accused." Under German law, a court must now decide whether to open the case against Gribkowsky. BayernLB declined to comment. The Guardian