Ecclestone Questioned by U.K. Tax Authority on $5 Billion TrustAlex Duff and Tom Metcalf
Bernie Ecclestone, Formula One’s billionaire chief executive, said he’s been questioned by the U.K. tax authority over whether he interfered with a family trust set up to avoid inheritance tax.
The fund, Bambino Holdings Ltd., was established in 1997 after Ecclestone had heart-bypass surgery and it’s managed out of Switzerland and Liechtenstein, Ecclestone’s biographer Tom Bower said by phone. The fund’s trustees could be liable to pay as much as half of its assets to the U.K. if he’s found to have been involved with its management, Bower said.
London-based Ecclestone denies any involvement, saying he has “had nothing to do with” the fund. Bambino holds assets worth $5 billion, based on its 8.5 percent stake in the motor racing series and cash flows since 1997, according to the Bloomberg Billionaires Index.
“We’re having a chat with” the Inland Revenue, Ecclestone, 83, said by phone yesterday. “They’re looking at things, they’re doing their job.” He declined to give any further information about the discussions.
Inland Revenue spokesman Patrick O’Brien said the authority doesn’t comment on individual cases.
Ecclestone has owned or managed Formula One since 1995, becoming a billionaire by selling off stakes to groups including CVC Capital Partners Ltd.
In 2011, Ecclestone testified he paid $44 million to Gerhard Gribkowsky after the banker threatened to disclose possible tax violations by Bambino, whose trustees are his former wife Slavica and their two daughters. Ecclestone denied it was a bribe.
In a subsequent phone interview, Ecclestone said he was concerned at the time that the Inland Revenue would start an investigation lasting several years.
“Clearly Ecclestone has a problem” with the tax authority, Bower said, adding that the U.K. “will find it hard” to obtain information from Switzerland to pursue its investigation.
Ecclestone yesterday defeated a $140 million U.K. lawsuit brought against him by German media company Constantin Medien AG over the 2005 sale of Formula One to CVC. He said the court decision makes him a “bit better off financially than I could have been.”
Even so, Judge Guy Newey said Ecclestone had paid bribes to ensure a ‘‘corrupt arrangement” over the sale of Formula One and was not a “reliable or truthful” witness.