Ownership row has Caterham in disarray, F1 future in doubt

The consortium that bought the team from Tony Fernandes has yet to be transferred the actual shares in the team, they claim, leaving the outfit in lurch and in danger of being dissolved entirely.

Caterham driver Kamui Kobayashi crashes into a gravel bed at the Australian Grand Prix in March. Diego Azubel / EPA / March 16, 2014

Caterham Formula One employees found their factory closed on Thursday but a legal administrator overseeing the property held out hope that the struggling team might still survive.

Finbarr O’Connell told Reuters various parties had approached him to express interest either in the assets or keeping Caterham racing as an F1 team and negotiations were ongoing.

“They (the staff) can’t get into the factory today,” said the joint administrator of Caterham Sports Limited (CSL), a company that makes and services the cars for entry holder 1Malaysia Racing Team (1MRT).

“They (1MRT) are using my facilities and haven’t paid me,” added O’Connell, a restructuring and recovery partner with London firm Smith and Williamson.

He said the factory would be reopened if a deal was reached after meetings on Wednesday with lawyers and representatives of 1MRT failed to find an acceptable solution.

Management of 1MRT issued an explosive statement on Wednesday, threatening to walk away and take legal action against Malaysian team founder Tony Fernandes.

They accused him of failing to transfer ownership following an announced sale in July and said he was now responsible for the team.

Fernandes, a high-profile entrepreneur who runs the AirAsia airline and is chairman of struggling Premier League football side Queens Park Rangers, told the BBC on Wednesday night the statement was ‘garbage’.

The war of words indicated the team had entered a new and potentially terminal phase, with cars and freight due to be sent to Texas at the weekend for the US Grand Prix in Austin.

There are two races remaining after Austin and Caterham will be in breach of contractual agreements if they do not show up.

Team sources say the race cars are inside the Leafield factory but O’Connell, who has said they cannot leave without his permission, suspected there might be “a few chassis” elsewhere and he was investigating that.

He insisted that despite the air of crisis, there was still time to find a solution.

“Effectively 1MRT have been in the building for last few days since I arrived,” said the administrator, who was appointed last Friday.

“We are trying to reach an acceptable arrangement for them to be there. We had a meeting yesterday with 1MRT and lawyers and the offer they made was unacceptable. So I’ve sent them away.

“Hopefully they can come up with an acceptable proposal.”

“I don’t think this is gone,” said O’Connell of the team’s prospects for survival. “It’s just a case of who has got the money to make it work.”

Earlier on Wednesday, the team’s new owners launched a bitter attack on Fernandes.

They claimed that they have been running the backmarkers without being the legal owners after a row over transfer of shares and described the team’s recent difficulties as “detrimental”.

“Since the date of the agreement, the seller has refused to comply with its legal obligations to transfer their shares to the buyer,” said an angrily-worded statement.

“The buyer has been left in the invidious position of funding the team without having legal title to the team it had bought.

“This is in total contradiction to the seller’s press release of 3 October 2014 which stated that Mr Fernandes and his Caterham Group had no longer any connection with the Caterham F1 team.

“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.

“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.”

However, Fernandes claimed later Wednesday that he had yet to be paid for Caterham by the consortium.

“If you buy something you should pay for it. Quite simple,” he tweeted.

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