Former Formula One boss Bernie Ecclestone's trouble continues; faces new allegations

Ex-boss of Formula One Bernie Ecclestone has been accused of avoiding a potential tax bill of more than 1 billion pounds (Rs 10,216 crore ), when HM Revenue and Customs (HMRC) settled a nine year long-running investigation for £10m (Rs 102 crore ). The billionaire denied all such accusations and said he has done nothing to avoid any potential tax bill fraud.

Right now, the former CEO of Formula One, is facing his trail in the court of Munich of allegedly making a payment to Gerhard Gribkowsky, a banker who worked as a Chief Risk Officer for Bayern Landesbank. The bank was selling 47% of stake in F1 and it is alleged that the money was paid to Gribowsky to undervalue the shares, so that the CVC, a firm of Bernie would have to pay less to acquire the owning rights of Formula One. Moreover, Ecclestone said that he paid the amount because he was blackmailed by Gribowsky. He admitted paying a sum of $44m ( 266.68 crore) in the due accordance of threat made by Gribkowsky. Bernie added that in order to save the deal, he paid the stated amount so that Gribkowsky would not make any false complain to the UK tax authorities.

In the year 2011, Ecclestone testified during Gribkowsky's trail, while now the turning of events have made Gribkowsky the main witness of Ecclestone's trial which is scheduled to last until September 16. Peter Noll, the common judge in both the trails had found Gribkowsky guilty of corruption, tax evasion and breach of trust. Right now the banker is serving an 8-year sentence for taking money.

Moreover, the long list of charges on Ecclestone's includes a damage suit of $140m ( Rs 848.73 crore) filed by the German media firm Constantin Medien in the London High Court. The company claims that it had lost a huge amount of commission because of the undervaluation of BayernLB’s shares. Following to the next is the lawsuit filed in US by an equity group that the former F1 boss has conspired to prevent the group from buying F1 in 2005. The billionaire is also facing a criminal investigation on the payment of $44m. 

While the latest allegation from the British Channel -BBC Panorama programme stated that the Ecclestone in 1996 had transferred his Formula One assets to his wife Slavica from which he later divorced. The assets under his wife's name was then moved to one of the family's trust in the tax beneficial country Liechtenstein. The transfer of the assets were legal only if the Ecclestone has never involved in the operation of trust. HMRC investigated Ecclestone family’s tax for nine years and later settled for £10m payment from the family trusts in 2008.

While, according to the Panorama, Ecclestone’s ex-wife used to pay him $100m each year since their divorce in 2009. The BBC Panorama gave the proof of a court transcript which showed Frédérique Flournoy telling a German prosecutor in 2011: “Since his divorce Mr Ecclestone has been receiving payments from his wife. He receives no payments from the trusts. Mrs Ecclestone received disbursements from the trusts, in other words she also has a personal asset. That is also the basis on which the divorce ruling fixed the payment amounts to Ecclestone.”

To which the 83 year old accused said, the trust was irrelevant and that the payments from his former wife (Slavica) were installments of the money she owed him from their divorce settlement. He added, “She is paying me an amount of money she has. It is all absolutely legal and straightforward without any ifs or buts. I am divorced from her, not the trust. I have unfortunately nothing to do with the  trust.”

Source: HT and The Guardian

Image courtesy: Ib times