Caterham management threaten to walk away from F1 team

Reuters News
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Posted: Oct 22, 2014 3:37 PM

By Alan Baldwin

LONDON (Reuters) - The struggling Caterham Formula One team looked close to meltdown on Wednesday with the new management threatening to walk away and accusing founder Tony Fernandes of never completing a formal transfer of ownership.

A team statement said all options were being explored and indicated legal action would be taken against Fernandes.

Malaysian entrepreneur Fernandes, who is chairman of struggling English Premier League side Queens Park Rangers and runs the AirAsia airline, was not immediately available for comment.

Caterham announced in July that a mystery group of Middle Eastern and Swiss investors had bought the team that entered the sport in 2010.

On Wednesday, the team said that since the date of the sale agreement "the seller has refused to comply with its legal obligations to transfer their shares to the Buyer."

It identified the 'seller' as Caterham Enterprises Ltd and Caterham UK Ltd with Sheikh Mohamed Nasarudin and shareholders Fernandes and Kamarudin Bin Meranun. The buyer was Engavest SA.

"The Buyer has been left in the invidious position of funding the team without having legal title to the team it had bought," the team statement said.

"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."

Wednesday's statement followed a fraught week for the team, who are last in the championship and have yet to score a point, with Caterham Sports Limited (CSL) taken into administration on Friday.

On Tuesday joint administrator Finbarr O'Connell told Reuters that the race cars, due to be flown to Texas at the weekend for the U.S. Grand Prix, would not be allowed out of the factory without his permission.

"My legal advice is that I own the cars and won't be allowing the cars out of the factory until I reach an acceptable agreement (with the team)," he said.

Bailiffs had already seized various items from the factory earlier in the month.

CSL employed the team's staff before the change of ownership was announced and were effectively responsible for making the cars, dealing with suppliers and running the factory at Leafield in central England.

The situation was complicated by the entry rights to the championship being held by 1Malaysian Racing Team (1MRT). The new 'owners' had argued that the company was completely separate to CSL.

Wednesday's statement said CSL going into administration had "devastating effects on the F1 Team's activities" and statements made by the administrators had been "severely detrimental".

"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," the statement concluded.

"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 team's drivers are Japan's Kamui Kobayashi and Sweden's Marcus Ericsson.

(Reporting by Alan Baldwin, editing by Pritha Sarkar)