Formula One boss, Bernie Ecclestone, has been asked to hand hundreds of millions of pounds in damages to a German bank that claims it was duped over the sale of the motor racing series.
By Helia Ebrahimi, Senior City Correspondent
8:02PM BST 25 Oct 2012
In the latest twist in the scandal regarding Formula One’s 2006 sale to private equity, Germany’s BayernLB has written “a letter of demand” to Mr Ecclestone asking him to pay back millions in alleged illegal payments and lost earnings to the bank.
BayernLB has demanded Mr Ecclestone pay back $41.4m (£25.7m) in alleged payments made to facilitate the sale – as well as up to $350m, which the bank claims was shaved off F1’s price tag in a sweetheart deal cooked up by a former banker in cahoots with the motor racing supremo.
In June, Gerhard Gribkowsky – the banker who had been Bayern’s chief risk officer – was sentenced to eight years in jail for tax evasion and receiving the alleged bribes from Mr Ecclestone.
German prosecutors allege that Mr Gribkowsky was bribed so that he would wave through the sale of F1 to private equity firm CVC for a knock-down price.
Mr Gribkowsky secretly received $44m from Mr Ecclestone, which at the trial he claimed was a bribe.
Mr Ecclestone admits the payment was made — £8m from his own account and the rest by his offshore family trust, Bambino, but he denies the payment was a bribe. Instead, he claims, the money was paid to Mr Gribkowsky in a “shakedown” to stop him reporting false allegations of tax evasion to UK authorities.
In addition to the $44m payment to Mr Gribkowsky from Mr Ecclestone, it was also found that Mr Gribkowsky paid Mr Ecclestone an extra kickback worth $41.4m from the accounts of BayernLB.
The payment was made in return for a financial guarantee offered by Mr Ecclestone that F1’s financial books were sound.
In his court testimony Mr Gribkowsky admitted that Mr Ecclestone did not need to be paid the “commission” by Bayern. “It was a bribe and …. I should have said no to his demands,” he said at the time.
Mr Ecclestone denies there was any wrong in being paid the commission. He also insists that the price agreed for the sale of the F1 stake was fair.
The German bank chose to pursue Mr Ecclestone for financial damages after gaining access to prosecution files from Mr Gribkowsky’s trial. “This is just step one,” said one insider.
The state-backed lender inherited its ownership of the racing series in 2002 after the Kirch media empire fell apart, leaving the bank with a 47.2pc stake.
Four years later, Mr Gribkowsky negotiated the sale of the bank’s stake to private equity firm CVC.