Caterham F1 - WTF?
PH attempts to untangle the bewildering situation unfolding at Caterham F1
As you will no doubt have heard, Caterham Sports Limited, the company that builds cars for the Caterham F1 team, has gone into administration, with staff locked out of the factory adding another twist to the tortuous tale unfolding over at the green team's Leafield base in Oxfordshire. But the genesis of Caterham's ownership wrangling and financial troubles runs way back to the end of June earlier this year.
Fernandes: "If you buy something you should pay for it."
It's a convoluted story, too. According to a Caterham statement, the outfit that actually runs the Formula 1 team - 1 Malaysia Racing Team - was the subject of a deal between "Caterham Enterprises Ltd, Caterham (UK) Ltd and Sheikh Mohamed Nasarudin (Seller) and their shareholders Tony Fernandes and Datuk Kamarudin Bin Meranun, [who] entered into a Sale and Purchase Agreement with Engavest SA (Buyer) with regards to 1 Malaysia Racing Team/Caterham F1 Team."
Simply, Caterham F1's owners agreed to flog the team to Engavest SA. But it's claimed that Tony hasn't actually transferred ownership of the shares, despite no longer having a financial interest.
The middle
Earlier this month Fernandes disputed these claims as garbage, taking to Twitter (@tonyfernandes) of all places in a rather unofficial approach. His sentiment was clear: "If you buy something you should pay for it. Simple."
According to buyers Engavest, this has meant that it "has been left in the invidious position of funding the team without having legal title to the team it had bought." Something, it claims, is in contradiction to Fernandes and his Caterham Group in citing he no longer had a connection with the F1 operation.
It says Caterham on it but who actually owns it?
Yesterday
On Thursday Fernandes was holding firm in the press release from Caterham. "We agreed in good faith to sell the shares on the basis that Engavest undertook to pay all of the existing and future creditors, including the staff," he says. "This was so important to me that I ensured the shares would not be transferred to the new buyers unless they complied with this condition.
"Sadly, Engavest has failed to comply with any of the conditions in the agreement and Caterham Sports Ltd (the UK operating company of the F1 team) been put into administration.
"Our agreement with Engavest was very clear: there was no legal obligation to transfer the shares to them unless certain conditions were met. Those conditions have not been met."
Light at end of the tunnel for drivers? Likely oncoming train
But yesterday Engavest raised the temperature of the argument with some lurid allegations about the tactics of the Fernandes camp. "The shares have not been transferred and therefore Mr Fernandes remains the owner of Caterham F1 and is fully responsible for all its activities," it concluded in a story from our colleagues at Autosport.
The end?
Fundamentally, the circuitous ownership battle is showing no signs of resolution. Engavest claims it has fulfilled the conditions of the deal, with all creditors paid, including Fernandes for his shares. This means Engavest claims financial ownership. Fernandes says it hasn't, and therefore hasn't transferred the shares, meaning he and his associates arguably still have control of the team. Clear? As mud...
Where does this leave Kobayashi and Ericsson? Er...
And now it seems the team will find it difficult to race in a week's time at Austin. De facto team boss Colin Kolles says the cars and the team are ready to go, but that without cooperation from the administrators, it'll be difficult to get to the grid for the US GP. The knock-on effect for the road car business remains to be seen in financial terms but word on the street has it staff there are deeply concerned all the same. No such thing as bad publicity? Not a phrase you'll be hearing at Caterham Cars, now in the unenviable glare of a controversy technically unconnected but emotively impossible to detach thanks to the shared branding.
Caterham F1 meanwhile currently holds the unenviable record for the most race starts without scoring a single point since it began in 2012 - its short-term future shows no signs of brightening up either, then.
Photos: LAT Photo
[Sources: Caterham F1 team statement, Autosport]
However for the avoidance of all doubt, the various parties should have employed the 6 "P"s.
Shame for the sport and all the fans, let alone the cloud cast over the sport car brand.
t on Twitter benefit anybody?How hard can it be?
t on Twitter benefit anybody?How hard can it be?
Oh wait, Bernie doesn't allow Sensible Grown ups in F1 :-)
However for the avoidance of all doubt, the various parties should have employed the 6 "P"s.
Shame for the sport and all the fans, let alone the cloud cast over the sport car brand.
Yes, once again F1 seems to be about to snatch defeat (unsavoury goings on, appearance of shady dealings, dedicated staff getting the Sh%^^y end of the stick...) from the jaws of victory (tightest WDC in years)
While we can huff and puff about Fernandes, I think in the main he is regarded as a fairly above-the-board kind of guy so I think in principle he is probably correct in his interpretation of events - but having very clearly expressed his desire to wash his hands of the team earlier in the year which did no favours to its chances, and his recent statements to the effect of being concerned for the team's employees and creditors, if he believes the other party have failed to fulfil their obligations, then clearly he believes he is still the owner; in which case he has to do the responsible thing and dip back into his pocket, to at least let the team see out the season with dignity.
On the other side of the equation, I am suspicious of any organisation that involves itself in a F1 team but seeks to be anonymous at the same time. If anonymity were an important issue for a consortium of presumably very wealthy people, then one has to wonder why they'd consider even the slightest involvement in F1 as something worth having. Which leads me to think there's a lot of smoke and mirrors going on at the Swiss side of the equation. Anyone remember the alleged purchasers of Sauber back before BMW saw sense and handed it back to Mr Sauber? I wonder what became of them....
Such is the world of the emerging market, entrepreneur with a few billion to play with, where you can't quite tell if he has debt or equity, you can't quite tell where the money has come from, and you aren't quite sure who owns what.
The main winners of all this seem to be the lawyers. The "sport" of F1 is just a sideshow and, for many of the people funding it, simply a way of parking some money somewhere legitimate and holding some nice parties around the world.
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