Will Bernie Ecclestone be forced to leave Formula 1 behind?

Ecclestone insisted he had been a victim of coercion by the former banker

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The Independent Online

Five years ago, GG Consulting, a company set up by a German banker, received £27.5m. The cash came from Bernie Ecclestone and, depending on the outcome of a criminal inquiry in Munich and a £407m lawsuit in New York, it may spark the end of his 40-year control of Formula One.

The money transfer is at the heart of a tale of alleged bribery with more twists and turns than the Monaco Grand Prix. The saga is set to come to a head in the coming weeks and could seal the legacy of the 82-year-old billionaire who is responsible for turning F1 into one of the planet's most glittering – and lucrative – spectacles.

German prosecutors are due to decide shortly whether the famously diminutive Briton should face charges over claims that the £27.5m was an inducement paid to Gerhard Gribkowsky, a former senior executive with a state-owned German bank, to ensure it sold its controlling stake in F1 to CVC Capital, a London-based private-equity firm that had agreed to retain Mr Ecclestone as the sport's supremo. The allegations, which were repeated in a separate lawsuit filed by a US investment fund recently, have been flatly denied by Mr Ecclestone. But if the German authorities decide the billionaire should face charges, it could make his position at the head of F1 untenable.

With no successor groomed to replace him, the legal tussles facing Mr Ecclestone come at a delicate time for the sport with CVC considering a multibillion-pound float of some of its F1 shares and the multinational car firms and corporate sponsors that help fund the sport demanding strict compliance with legislation, including anti-corruption laws.

In an interview with The Independent, Mr Ecclestone yesterday insisted he had no plans to retire but warned that the sport risks being thrown into turmoil when he decides to give up the wheel because of the likelihood he will be followed out the door by key personnel and several races. Speaking ahead of this weekend's final Grand Prix of the season in Brazil, he said: "One day, I'm not going to be there and one of the biggest problems is I've got really, really good relationships with the race promoters. A few of them said to me, 'if you're not there, we're not there'. That's what the danger is. They feel that they trust me and wouldn't want to let me down. That's probably a very important issue. I think about retiring but I'm not going to do it. What would I do?"

Prosecutors in Munich said yesterday their investigations are continuing but they are expected to decide by early in the new year whether to bring charges against Mr Ecclestone after Gribkowsky was jailed this summer for eight years on charges of bribery, embezzlement and tax evasion linked to the 2005 sale of shares to CVC. Mr Ecclestone has admitted making the £27.5m payment to Gribkowsky but told the former banker's trial that he only did so because he was being blackmailed by the banker with false claims about his tax affairs that would have led to a hugely expensive investigation by HM Revenue & Customs.

The Briton has said he is "absolutely not guilty" of paying a bribe and the banker had been "shaking him down".

The son of a fisherman who left school at 16 and started his business career as a dealer in spare parts for motorcycles, Mr Ecclestone placed himself at the centre of a web of deals between teams, venue owners and broadcasters; the sport generates annual revenues of $1.5bn and profits of more than £300m. Its races are watched on television by more than 300 million people.

But the dominance of the Briton, whose personal fortune is put at £1.75bn, was under threat in 2005 after a German financier, Leo Kirch, defaulted on loans he had used to buy a 75 per cent stake in the sport and left a trio of banks led by the state-owned Bayerische Landesbank in control.

As Bayerische's executive in charge of disposing of its F1 shares, Gribkowsky was in a powerful position to decide who would control the sport and sanctioned a deal to sell its shares to CVC Capital for a reputed $800m (£500m), putting the private-equity fund in pole position to profit massively from the sport's subsequent expansion. As part of the deal, Mr Ecclestone remained as F1's chief executive.

The rest would have been so much sport-finance history had it not emerged that between 2006 and 2007 Gribkowsky received the payments totalling £27.5m from Mr Ecclestone, allegedly funnelled through a series of shell companies to GG Consulting's Austrian bank account. In a sign that the focus in F1 may have switched from chicanes to chicanery, Gribowsky told the German court that the money was a bribe to ensure that the sale to CVC Capital went ahead. The judge presiding over the court concluded that Mr Ecclestone had been the "driving force" behind the payments.

But in his own testimony to the trial, Mr Ecclestone insisted he had been the victim of coercion by the former banker, who had threatened to approach the British tax authorities with false allegations relating to a family trust.

He said: "The only alternative was that the British tax authorities followed a case that would have been very expensive for me. The tax risk would have exceeded £2bn. I paid him to keep calm and not to do silly things."

The Munich case led last week to lawsuit being filed in Manhattan by Bluewaters Communications, an American investment fund which insists its $1bn bid for F1 was thwarted as a result of the alleged kickback made by Mr Ecclestone, who it is claimed was "motivated by a thirst for power". Bluewaters alleges that Mr Ecclestone knew the money he paid to the German – which, it is claimed, came from money paid by CVC and Bayerische to the Briton as a "finder's fee" – was designed to secure a sale to the private-equity company.

The American investment fund claims it submitted an offer to Bayrische of $1bn with a further undertaking that it would pay a further 10 per cent on top of what any other bidder was prepared to pay. When it lost its bid, Bluewaters claims it was told by Mr Ecclestone that the Germans had simply preferred the CVC deal.

In its claim to the American courts, Bluewaters said: "The defendants engaged in a conspiracy in which they used a corrupt and illegal bribe, and kept the bribe secret, to the severe detriment of Bluewaters. Ecclestone was motivated by a thirst for power. He wanted desperately to remain 'F1 Supremo'. It was all he cared about."

Mr Ecclestone declined to comment when approached by The Independent but earlier this week said there was no basis to the Bluewaters claim and vowed to fight the claim in court if necessary. He told Reuters: "I couldn't have been involved because I had nothing to sell."

CVC Capital also declined to comment but has previously denied any knowledge of payments made to Gribkowsky. Bayerische declined to comment on the Bluewaters suit.

Life in the fast lane: Bernie Ecclestone

The son of a trawlerman from Bungay, Suffolk, Bernie Ecclestone left school at 16 and took his first job at a London gas works. He discovered a passion for cars and motorbikes, selling spare parts and then new vehicles while indulging his enthusiasm for racing. An accident put paid to his aspirations and he decided to concentrate on motorsports management.

A natural deal-maker with charm and an iron will, the thrice-married Ecclestone knitted together a network of partners and teams that put him at the helm of F1 for nearly 40 years and made him a billionaire.