Niki Lauda has told Red Bull they overpaid on Max Verstappen's new contract as Mercedes never entered negotiations with the Dutchman.
Reports earlier this year claimed that 20-year-old Verstappen, one of Formula One's brightest young talents, was in talks over a switch to the constructors' champions.
However, Verstappen signed a bumper new contract with Red Bull through to the end of 2020 in October, with suggestions that links to Mercedes increased the value of his deal.
Lauda, Mercedes' non-executive chairman, denied that an approach was ever made, though.
Speaking to Servus TV, he said: "We never made a proposal to Max.
"I have a good relationship with [Red Bull advisor] Helmut Marko as we often talk and fly together.
"We talked about Verstappen and I told him that they could have saved a lot of money, since we never entered negotiations with him."
Verstappen finished sixth in this year's drivers' standings, 32 points adrift of team-mate Daniel Ricciardo in fifth and 195 off champion and Mercedes star Lewis Hamilton.