COLOGNE, Germany – In a dramatic turn in the long-running bribery probe into the Formula One racecar circuit, a German banker has admitted to receiving $50 million (€44 million) in bribes from Formula One boss Bernie Ecclestone. The money, according to Bavarian banker Gerhard Gribkowsky, was paid in exchange for him waving through a dubious deal to sell a 48 percent stake in Formula One to an Ecclestone-friendly investment group.
Gribkowsky has been in custody since early 2011 on charges of embezzlement and tax evasion. He made the confession on Tuesday, just ahead of sentencing in the case.
The trial involves events dating back six years ago, when Gribkowsky’s bank, BayernLB, was charged with the sale of the F1 stake. BayernLB, one of the major creditors of late German mogul Leo Kirch’s KirchGroup, took control of the F1 stake after KirchGroup went bust.
The share in the lucrative racecar circuit had previously been valued at between $1.5 billion to $2.5 billion but BayernLB, under Gribkowsky’s guidance, sold it to British investment group CVC for much less, a reported $837 million. In addition, BayernLB paid Ecclestone and his family investment holding Bambino around $66 million in fees for brokering the deal. A few months later, Gribkowsky received the first of two $25 million deposits to his bank account.
In court, Gribkowsky said the bribe was Eccelstone’s idea and that the 81-year-old racing giant had offered him a job as a Formula 1 advisor after the deal went through. Ecclestone, who has testified in the case, denies this, putting all the blame on Gribkowsky.
Tuesday’s confession could up the pressure on Ecclestone. The Munich prosecutors office is already investigating him in connection with the deal. Ecclestone’s attorney Sven Thomas, in a statement following Gribkowsky’s confession, said it would have no impact on the investigation into his client’s dealings.
It may, however, further delay Formula One’s planned IPO. Ecclestone put off a planned $1 billion float of Formula One on the Singapore stock market earlier this year. The ongoing bribery case could put the public listing on hold for much longer.
It is unclear whether the confession will have a major impact on Gribkowsky’s sentencing. The court will issue its ruling next week but has said the former banker can expect a sentence of between 7 years and 10 months and 9 years in prison.