Ecclestone named in bribery case

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BERNIE Ecclestone has been named by prosecutors as having paid a $US44 million ($41m) bribe to a German banker after the sale of Formula One.

It was also alleged that he received $US41.4m in commissions from a German bank, while a family trust company was paid $US25m.

Formula One's billionaire chief executive is now waiting to discover whether he will face charges.

The timing of the claims by state prosecutors in Munich could not be more sensitive. Ecclestone is expected to attend the German Grand Prix on Sunday.

Seven months after Gerhard Gribkowsky, a former management board member at BayernLB bank, was detained in jail, prosecutors finally pressed charges against him yesterday.

They may lead to a trial that could go to the heart of the sale in 2006 of Formula One to CVC Capital Partners, the London City-based private equity firm.

Gribkowsky is charged with breach of trust, tax evasion and receipt of corrupt payments.

Ecclestone, chief executive of CVC's Formula One business, denies any wrongdoing and has told journalists in Germany that he will show up at this weekend's Grand Prix, unafraid of the threat of arrest. "Why should I not go?" Ecclestone has said. "Why would you arrest me? There is no reason."

Ecclestone, 80, has already given evidence to the prosecutor's office and says he will be exonerated. But there is intense speculation that he could yet face charges of aiding and abetting Gribkowsky, who is accused of overseeing the sale of the 48 per cent stake in Formula One held by BayernLB, also known as the Bayerische Landesbank, without updating its valuation, in return for bribes disguised as consulting contracts.

Under German law, a court will now decide whether to open a case against Gribkowsky, but he faces up to 10 years in prison if convicted.

Prosecutor's spokeswoman Barbara Stockinger said Gribkowsky personally took payments of $US44m from the Formula One chief executive, identified only as "Bernard E", and the Bambino Trust, well known as part of Ecclestone's personal financial empire.

The prosecutors also allege that Gribkowsky used BayernLB money to pay Ecclestone a commission worth $US41.4m and added a further agreement for $US25m to be paid to the Bambino Trust.

Gribkowsky is accused of failing to pay tax in Germany by trying to disguise payments from Ecclestone by feeding them through an Austrian company set up under phony consulting contracts and then sending the cash on to shell companies with addresses in Mauritius and the British Virgin Islands.

"According to this investigation, this is bribery money," the prosecutor said.

"These payments would not have been asked for were it not for the bribes to be paid to the accused.

"The Bayerische Landesbank incurred damages of almost $US66.5m through the conduct of the accused."

The decision to press charges against a banker almost unknown to most people in Formula One brings to a head months of speculation. Formula One's finances have always been labyrinthine, with Ecclestone secretive about how he runs one of the world's most successful sports businesses, worth more than $US1 billion a year.