The Caterham F1 Team’s chances of participating in next weekend’s United States Grand Prix look to be in complete disarray, with the final outcome dependent on crisis talks with the London-based administrator of Caterham Sports Ltd.
The team’s new management has issued an explosive statement to the media, accusing former owner Tony Fernandes of blocking the transfer of shares in the team after agreeing to sell the struggling outfit to a still-unnamed consortium of Swiss and Middle Eastern investors fronted by former F1 team principal Colin Kolles.
“After three months of operating the Caterham F1 Team in good faith, the Buyer is now forced to explore all its options including the withdrawal of its management team. Lawyers have been instructed by the Buyer to bring all necessary claims against all parties, including Mr Fernandes who, as an owner, will run the F1 operation,” the statement reads.
The new owners – listed as ‘Engavest SA’ – claim that they agreed to terms with the previous owners at the end of June to take control, however, they now say that the seller (Fernandes) has refused to comply with its legal obligations to transfer the shares. That has left the new owners in “the invidious position of funding the team without having legal title to the team it had bought [which would lead to] devastating effects on the F1 team’s activities”, the statement claims.
Fernandes was quick to respond to the statement, launching a withering one-liner on his Twitter account:
If you buy something you should pay for it. Quite simple
— Tony Fernandes (@tonyfernandes) October 22, 2014
The administrators, Smith & Williamson – appointed on behalf of Export-Import Bank of Malaysia Berhad (Exim) – have now come in to try and sort out the mess.
The team’s entry belongs to 1Malaysia Racing Team while Caterham Sports Ltd controls the operating arm of the team. With the paperwork obviously being kept under lock and key, it’s difficult to determine exactly what has happened to bring the affair to a head. It seems that shares in some of the companies in the original structure (when Fernandes was in charge) may have been pledged in exchange for loans. If the pledges were not lifted, then the new owners could not take control and that would prevent their backers from being able to commit money to the project.
Smith & Williamson now controls the goods that were seized by bailiffs during the Japanese Grand Prix weekend from the team’s Leafield headquarters.
The key question is who actually owns the team’s assets, being its machinery and – most importantly – its cars, all of which are under the control of the administrator who won’t release it until it can achieve a satisfactory settlement.
The cars and equipment are due to be shipped to Austin this weekend for the following weekend’s Grand Prix at Austin. The team’s Leafield factory is currently being guarded by privately employed former Gurkha soliders, although 1MRT staff are allowed to access the facility while the settlement is being negotiated.
“Positive discussions were held between the administrators and the team manager, Manfredi Ravetto, and also with the financial backers of the team on Friday 17 October and it is hoped that these will lead to a financially acceptable arrangement for the continuation of the relationship between the company and the F1 Team,” a statement from the administrators said.
“If a financially acceptable arrangement cannot be agreed between the administrators and the Caterham F1 Team the administrators will then enter into dialogue with other interested parties with regard to a sale of the business and assets of the company.”
Caught in the middle of this ugly tug-of-war are the remaining Caterham F1 Team staff, who will have serious questions over the short-term future of the team, its facilities and their livelihoods.
It’s a very sorry mess indeed.