In 1999 it was bought by Excelis, a French company which was ultimately owned
by Bambino. An extensive renovation involving 1,200 workers was carried out
to transform the circuit into a hi-tech test track.
This work was co-ordinated by Philippe Gurdjian, the chairman of Excelis,
along with Mr Ecclestone, and he says this formed the basis of Mr
Gribkowsky’s threat.
“I helped the people that own the circuit in Ricard, it belongs to the trust,”
says Mr Ecclestone. “I helped them and told them the sort of hospital they
should build and even the sort of car run-off areas they should build.
Gribkowsky said, I ran the trust and this is one example.”
The Liechtenstein-based Bambino trust was established in December 1997 by Mr
Ecclestone’s Croatian ex-wife, Slavica, who is one of its three
beneficiaries along with their two daughters.
Its key assets were shares in FOCA Administration, which directly held the
rights to F1 and was previously wholly owned by Mr Ecclestone.
He says he was advised to transfer his shares in it to his former wife because
she had not lived in the UK long enough to be domiciled. Accordingly, if Mr
Ecclestone had died, she would have had to pay 40pc inheritance tax on money
received from him, even though spouses are usually exempt.
Mr Ecclestone is 82 and during the late 1990s he suffered from heart problems
which led to him having a triple bypass operation in 1999.
This was the driving force behind the creation of the trust. As a UK taxpayer,
Mr Ecclestone was not allowed control over the trust, otherwise it could be
declared a sham and tax would have to be paid on it.
The reason for this lies in a clause in the Income and Corporation Taxes Act
1988, which has since been carried over to the Income Tax Act 2007.
It states that if a UK resident transfers assets to a non-domicile and income
becomes payable to the non-domicile, the transferrer must not at any time
have “the power to enjoy” that income, otherwise it will be deemed to have
been his own.
Mr Ecclestone says that his unique experience and position at the helm of F1
made him the best man for the job. He adds that it was not an exception.
“Like most circuits in the world, they asked me for help,” he says.
In his witness statement, Mr Ecclestone said that, although there was no
substance behind Mr Gribkowsky’s allegation, he was concerned HMRC might
take it seriously and that it “might cause them to assess me to owe a tax
bill of many hundreds of millions, if not billions, of pounds that I believe
I did not owe”.
He added that it would have put “the burden of proof on me to prove that the
authorities were wrong in their assessment, and therefore I acquiesced in
his demand for these payments”.
Mr Ecclestone says he thinks Mr Gribkowsky deserved to be imprisoned for this.
“I tell you what Gribkowsky should have been locked up for. He shook me down
and put me in a position that I believed perhaps he was going to do what he
was saying he could do, even if he couldn’t,” Mr Ecclestone said.
“So, for sure he should have been punished for that.”
Mr Ecclestone is still being investigated by the Munich prosecutors and HMRC
has opened up an investigation into his affairs. The prospectus for the
planned flotation of F1 on the Singapore stock exchange reveals that HMRC
does not suspect Mr Ecclestone of tax evasion but is investigating to see if
his payments have been sufficient.
The flotation prospectus states that “Mr Ecclestone was notified in March 2012
that HMRC in the UK is currently investigating his tax affairs focusing
primarily on his connections directly and indirectly to offshore trusts.
“HMRC has informed Mr Ecclestone that the investigation is being conducted in
accordance with Code of Practice 8.
“This is applied in cases where there is no suspicion of tax evasion, but
instead HMRC wishes to investigate if any tax planning undertaken by a
taxpayer is effective to achieve its intended effect.
“The purpose of the investigation is to identify if there are any amounts of
underpaid tax.”