Ecclestone Trial Key Witness Questioned by U.K. Tax Authority

Gerhard Gribkowsky, the key witness in the bribery trial against Bernie Ecclestone, was questioned several weeks ago by the U.K. tax authority over a family trust set up by the Formula One’s billionaire chief executive officer.

The former banker told a German court today that British authorities questioned him about Ecclestone’s role at the fund, Bambino Holdings Ltd. Ecclestone is standing trial in Munich on charges he bribed Gribkowsky, an ex-manager at Bayerische Landesbank, with $44 million to steer the 2005 sale of a Formula One stake.

“I told them what I told this court: I didn’t have any inside knowledge on Bambino but I used the issue at the time to put pressure on Ecclestone to make him settle litigation over Formula One,” Gribkowsky said.

At the start of his trial in April, Ecclestone told the court he established a company in the late 1990s before he underwent heart surgery. He put assets, including a stake in Formula One, into it so that his former wife and his daughters wouldn’t have to pay inheritance tax in case he didn’t survive. His ex-wife later decided to move the assets to the Bambino trust, which he had no control over, he said.

Gribkowsky threatened to provide tax authorities with material that showed that he was actually overseeing Bambino, the F-1 chief said. At the time, Ecclestone was facing a multi-year review that could have resulted in tax payments of as much as 2 billion pounds ($3.4 billion) that could have destroyed his life achievements, the 83-year-old said. To avoid that, he paid the $44 million to Gribkowsky, the F-1 head told the court.

Siamese Twins

The former BayernLB manager told the court today that Stephen Mullens, Bambino’s director at the time, and Ecclestone acted like “Siamese twins” in 2005 when they negotiated the stake sale.

Mullens has separately been charged by Munich prosecutors over the $44 million payment. He is scheduled to testify in the Ecclestone trial in July.

London-based Ecclestone has denied any involvement in 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 U.K. Revenue and Customs department, Ecclestone said in February. “They’re looking at things, they’re doing their job.” He declined to give any further information about the discussions.

Ecclestone has owned or managed Formula One since 1995, becoming a billionaire by selling off stakes to groups including CVC Capital Partners Ltd.

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