Caterham F1 in crisis as new management threaten to quit team amid ownership row
Buyers & Tony Fernandes in dispute over terms of takeover; Factory locked to staff on Thursday after supplier CSL administration; Team exploring "all options" and threaten legal action against Fernandes, who still holds the shares; Caterham's U.S. GP participation in doubt
By James Galloway
Last Updated: 23/10/14 5:30pm
Caterham’s Formula 1 future has been plunged into serious doubt with the team’s new management threatening to pull the plug on their involvement amid the onset of a bitter ownership row with founder Tony Fernandes.
The beleaguered Leafield outfit have been at the centre of speculation ever since Malaysian businessman Fernandes and his partners, who founded the team in 2010, agreed to sell the team to a group of unnamed Swiss and Middle Eastern investors in July.
The news on Tuesday that a supplier to the F1 operation also based at the same Leafield facility, Caterham Sports Limited (CSL), had gone into administration served to cast fresh doubt on the team’s future, although the outfit swiftly moved to deny that they would be directly affected.
However, the saga took a new and dramatic twist on Wednesday night as the team issued a strongly-worded press release in which they admitted that CSL entering administration had served to have “devastating effects” on the F1 team and that the administrators subsequent press statements had proved “severely detrimental”.
The joint administrator Finbarr O'Connell has said that the team's race cars will not be allowed out of the factory without his permission, while on Thursday the Leafield factory was closed to the team's staff. The flags outside the Leafield facility were also lowered during the course of the dramatic day of claims and counter claims.
With the lock-out putting the team's participation in next weekend's U.S. GP in serious doubt - their cars are scheduled to be flown to Texas on Saturday - an ownership row has subsequently broke out between the mysterious buyers of the team, which were for the first time named as Engavest SA, and founder Fernandes. Both sides have claimed that the other hasn't honoured the terms of their sale agreement, with Engavest saying the Malaysian remains the owner of the team as no shares have ultimately changed hands.
Fernandes initially issued a brief response to the claims on Twitter before issuing a hard-hitting full statement in which he said that "Engavest has failed to comply with any of the conditions in the agreement".
The row appears to rest on whether CSL is legally classed as a supplier or a subsidiary of the F1 team, whose licence is held by 1MRT, and as a result which party is liable for the debts, which are thought to amount to £20 million.
On Thursday the Engavest-controlled F1 team said: "On 29 June 2014 Engavest SA signed a Sale and Purchase Agreement with Tony Fernandes and the Caterham Group to acquire the shares of 1Malaysia Racing Team/Caterham F1. Engavest SA has fulfilled all the conditions precedent, including paying the purchase price for the shares.
"The shares have not been transferred and therefore Mr Fernandes remains the owner of Caterham F1 and is fully responsible for all its activities."
The new management had earlier said they were exploring all options, including a withdrawal from the team, and had instructed their lawyers to bring legal proceedings against Fernandes.
"The administrators of Caterham Sports Limited have been appointed on behalf of Export-Import Bank of Malaysia Berhad (Exim), a creditor of Mr Fernandes and the Caterham Group. The Buyer has no connection with Exim. Caterham Sports Ltd was a supplier company to the Caterham F1 Team. Very regrettably, the administrators' appointment has had devastating effects on the F1 Team's activities. Since their appointment, the administrators have released various press statements which have been severely detrimental to the management of the Caterham F1 team," the original statement issued by the team read.
"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."
Fernandes, whose business interests include AirAsia and Queens Park Rangers football club, issued a blunt response to the claims via his personal Twitter account: "If you buy something you should pay for it. Quite simple."
Since launching under the Lotus Racing name in 2010, Caterham have yet to score a point in 93 races and are on course to finish bottom of the Constructors' Championship for the second successive year.