Ecclestone: why I paid a banker £27m hush money

Formula One supremo Bernie Ecclestone arriving at court (Getty Images)

The Formula One boss, Bernie Ecclestone, admitted yesterday to paying a Munich banker £27.5m to stop him from making allegations about a family trust to the Inland Revenue which he claimed could have made him liable for billions in back tax.

Mr Ecclestone, 81, appeared as a key witness in a Munich court in what has been billed as Germany's biggest post-war corruption trial, involving payments and alleged bribery totalling more than £55m. He told the court he paid the £27.5m to banker Gerhard Gribkowsky in 2006 to prevent him from making what he said were unfounded allegations that he controlled a family trust called Bambino.

He said he feared the allegations could have left him liable for back tax estimated at about £2bn. "It would have been a disaster for me. It was risk I could not afford to take," he said. "I thought that if he [Gribkowsky] gets upset with me, he might do something quite vindictive.

"I thought if I give him the money, it might help to keep him quiet and peaceful and not do silly things."

The payment was made during the sale of Formula One in 2006. At the time, Mr Gribkowsky worked for the state-owned Bayerische Landesbank (BLB) and was in charge of the sale of BLB's Formula One stake. Under the deal, Mr Ecclestone is alleged to have received the equivalent of £25.4m from the BLB with a further £15.5m being paid into the Bambino trust.

Prosecutors have charged Mr Gribkowsky with bribery, corruption and tax evasion. He faces up to 10 years in jail if convicted. The case relates to a large Formula One stake which BLB sold to a private equity company called QVC five years ago. Mr Ecclestone told the court Mr Gribkowsky had been fascinated by Formula One and had told him how he wanted get out of banking and start up business on his own, which would include a stake in motor racing. Mr Ecclestone said he told him, "We'll think about it". "In fact this was a British way of saying no," he said.

The Formula One boss said he feared that if he failed to help the banker with his ambitions, he would make unfounded claims suggesting that he was the sole controller of the multibillion-pound Bambino trust Mr Ecclestone set up for his estranged wife. Mr Ecclestone said the taxman finally cleared him of any involvement with the trust in 2008.

Mr Ecclestone insisted that if Mr Gribkowsky had made the allegations, the Inland Revenue would have had no option but to investigate him. "The onus would have been on me to prove that I was innocent," he said. "It would have been a disaster. It was always my thought that this could happen. It was a risk I was could not afford to take."