Analysis: The court case scrutinising Stroll’s takeover of Racing Point Image Unavailable, Please Login Summation in the matter PJSC Uralkali versus Messrs G Rowley and J Baker – as joint administrators of Formula 1 team Force India (in administration) – was heard last Friday and Monday this week before Mr Justice Miles in the Royal Courts of Justice, 7 Rolls Buildings in London. The eight-day hearing had run since November 10th, with the 20rd and 23th set aside for final arguments. The matter was revealed by RaceFans in August 2018, within days of the sale of team assets to a syndicate headed by Lawrence Stroll, and subsequently entered under the new name Racing Point from that year’s Belgian Grand Prix. The subsequent developments were covered as follows: Why Force India’s rescue deal could still unravel Uralkali still wants to buy Force India if administration is overturned Force India administrators to be sued by Mazepin company over team’s sale Force India administrators expect Uralkali lawsuit to be dismissed Uralkali granted disclosure order in Force India case Racing Point and Haas settle two-year-old row over F1 prize money The back story to the final link above formed a major part of summations as there were doubts in August 2018 whether all (nine) teams would agree to a transfer of the full annual prize monies Force India had earned by that time (up to $60 million) to Racing Point. In terms of F1’s agreements the new entity would not be entitled to full prize monies for two years without consensus. This could clearly affect its eventual price. Image Unavailable, Please Login Uralkali sponsored Force India In documents seen by RaceFans, Uralkali, a potash fertilizer conglomerate whose ultimate beneficial owner is Belarus-born Russian oligarch Dmitry Mazepin – father of F2 racer Nikita (who previously tested for Force India and Mercedes) – claims the joint administrators failed in their duty to secure the best outcome during the administration process. Force India and Mercedes are implicated in the matter. Rowley is an experienced F1 team administrator, having acted in that role with Marussia and its successor team Manor MRT. The latter was powered by Mercedes engines, thus there had been historical dealings between Rowley and the German F1 operation. RaceFans was granted access to the Opus2 video court system and was able to observe proceedings closely. From his probing it became clear Mr Justice Miles, formerly a barrister specialising in civil fraud (often with foreign elements), commercial and financial law, having studied at Oxford University – is perfectly equipped to preside over this dispute. In court and in written submissions barristers on both sides presented persuasive arguments. Tim Lord QC led Uralkali’s charge; the defendants were represented by Jonathan Crow QC. Effectively the latter’s case hinges on robust denials and systematic deconstruction of all charges, combined with harsh words about the veracity of testimony submitted by Paul Ostling, a senior Uralkali director and leader of the bid team. Initially there were two bid options for the sale of the team, the details of which are essential to what transpired: Image Unavailable, Please Login FRP handled the administration of Manor Plan A: A full business rescue bid, effectively a ‘going concern’ sale, whereby company registration and assets would be sold to a successful bidder. This was deemed impractical as it required unanimous agreement from Force India team owner Vijay Mallya’s Indian creditor banks, who sought freezing injunctions. Plan B: An asset purchase where only hardware would change hands, without company registration and – crucially – no guarantee of an entrant licence or a continuation of prize monies under prevailing F1 regulations which require a team (company registration) to race for two seasons before qualifying for full revenues. The latter option was eventually transacted, with Stroll being the successful purchaser after he allegedly later switched his bid from Plan A to B having – so claim the joint administrators (JAs) – provided “a fall-back commitment to acquire the business and assets in case the rescue did not complete.” This switch, says Uralkali, was irregular and cost their company a substantial global marketing platform in addition to considerable costs of mounting a bid. However, according to the JAs’ submission Stroll withdrew his Plan A offer as it could have left him facing reputational risk – as reports had surfaced that Mallya had accepted a bribe – and had doubts over what he was actually buying. Plus, the Indian banks were demanding “a statutory declaration from him which he regarded as onerous and equivalent to a personal guarantee.” A spokesperson for Stroll clarified his stance on that matter as follows: “Racing Point was not unwilling to provide the statutory declaration sought by the Indian banks. However, doing so would have put Racing Point in a contractually untenable position. Image Unavailable, Please Login Four days after Force India went into administration, Nikita Mazepin tested for the team… “Had Racing Point proceeded with the rescue of Force India, it would have assumed liability for a consultancy agreement between Dr Vijay Mallya and Force India, which would have breached the statutory declaration. However, if Racing Point had terminated that agreement, which Racing Point had understood was the preferred position of the Indian banks, it would have exposed itself to a potential breach of contract claim from Dr Mallya. “By the time the Indian banks had finally provided an acceptable alternative approach to the statutory declaration, the rescue deadline under the bid letter had passed. Racing Point and the administrators were then contractually obliged to proceed with the sale and purchase of Force India’s assets.” As expected, the defendants went to great lengths to outline their due diligence and strenuously deny wrongdoing – citing the financial and time pressures required to complete a deal ahead of resumption of racing after F1’s August break – and vehemently deny any bias in favour of the Stroll bid, maintaining that Uralkali simply did not present a sufficiently persuasive overall package, and thus lost out commercially. Stroll is, of course, the father of F1 racer Lance. There is far more at stake here than the rivalry of two billionaire fathers, and from a legal perspective both are only peripherally connected. That said, it would be a stretch for either to suggest their sons’ aspirations played no part in their interests in acquiring an F1 team – Stroll has done so, and Mazepin has been linked to a potential investment at Haas. Image Unavailable, Please Login …by the end of 2018 Lance Stroll was in the car However, hard legal and commercial points are the issue, not paternal pushing nor even F1 conventions – although these angles obviously add interest and intrigue. Would such a dispute generate similar public interest were this an administration case over a defunct widget supplier? Unlikely. In its submissions, Uralkali alleges the administrators “represented (i) that the successful bidder would be selected on the basis of the best Plan B offer and (ii) a level playing-field would operate as between the bidders”, yet “nevertheless proceeded to select another bidder, Racing Point (a company owned by a Canadian businessman, Mr Stroll).” In short, Uralkali alleges the playing field was tilted in favour of Stroll’s bid. The claimant further alleges, “Mr Stroll was, all along, the favoured bidder both of the JAs and Mercedes (a major supplier to Force India, with whom the JAs liaised closely). The JAs gave substantial assistance to Mr Stroll in the run-up to the final bid – which included (but was not limited to) passing to him on 5th August (before the final-round bid) confidential information about the bid structure taken from Uralkali’s first-round offer.” May 2018 press reports suggesting “Mercedes was interested in developing a ‘B team’, which means a ‘shadow’ team to which Mercedes would supply parts and allow it to test new technology” are cited in evidence, as is “the possibility that Mercedes would be interested in developing Force India into its ‘B’ team through a tie- up with Mr Stroll.” The claimant states Rowley – then acting as a debt restructuring practitioner on behalf of FRP Advisory – was “parachuted” into Force India by Mercedes’ head of legal, Oliver Rumsey, in late May 2018 – well ahead of the administration of Force India – with a view to a “pre-pack administration.” Thus, they claim, the administrators had a bias towards a buyer chosen by Mercedes – themselves, or the Stroll bid. Image Unavailable, Please Login Dmitry Mazepin with F1 CEO Chase Carey and Ostling According to emails quoted in the documents, in June 2018 the Stroll syndicate offered “a cash injection ‘supported by a Mercedes ‘B’ team arrangement”. However, “discussions between Mr Stroll and the shareholders appear to have broken down by 26th July because of issues arising from the freezing injunction. The JAs’ understanding was that Mr Stroll’s team “believe[d] that Mercedes want them to be the purchaser”. RaceFans had previously learned that a number of prospective buyers had also expressed interest in purchasing the team prior to its going into administration, including New York investment fund Castle Harlan, Moorad Group (sports marketing), Rich Energy (the energy drink which spent a short but acrimonious spell as Haas’s title sponsor last year) and the (Michael) Andretti Group. Court papers substantiate that information. Then, as revealed by RaceFans at the time, before a sale could be concluded Force India went into administration. This was triggered by Brockstone Ltd, a company linked to driver Sergio Perez. In one swoop all previous interest was rendered moot. Rowley and his team were appointed as administrators by the courts, and the bid process commenced. Castle Harlan and Moorad dropped out early while Andretti’s Plan B offer was clearly deemed insufficient. Rich Energy’s offer was disqualified after the sale switched from Plan A to B. Uralkali, which originally claimed to have cut a deal with Mallya, submitted only a Plan B bid. This £101.5m offer included “a ratchet mechanism increasing the offer in the event of a higher offer from a competing party up to a maximum of £122m”. Rowley is also said to have previously suggested a joint venture of sorts between the Stroll syndicate and Uralkali, with the latter further alleging that Rowley met with Stroll and then helped him structure his consortium’s £90m winning bid – up from an initial £75m. However, the JAs submit the idea was conceived by Force India COO Otmar Szafnauer (now Racing Point CEO), then “developed by [Mercedes Motorsport CEO] Toto Wolff.” Indeed, the claimants allege, “within an hour of the bids coming in, Mr Rowley discussed the bids with Toto Wolff of Mercedes. Mr Wolff told Mr Rowley that Mr Mazepin was ‘too late to the party’, he [Wolff] had been involved in advanced discussions with Mr Stroll for the last 10 days and that ‘he would only back Lawrence Stroll’s bid’.” Image Unavailable, Please Login Racing Point has thrived under Stroll’s ownership However, Wolff later called Rowley to say: “Mercedes could not make a choice as they had to remain neutral to deal with whoever was the winning bidder”. The question is: Assuming the foregoing to be the accurate, what happened in the interim to lead Wolff to soften his stance on Uralkali’s bid? RaceFans was independently told at the time that Mazepin called Mercedes senior executives and suggested future orders for their trucks placed by Uralkali’s global operations – a figure of 7,000 units was mentioned – could go elsewhere. Allegedly Wolff added in a subsequent call involving Rowley and Mazepin that Mercedes had signed “a very advantageous agreement” with Stroll, “therefore he was their preferred bidder”. When Wolff was asked during a team media conference during the Turkish Grand Prix weekend to comment on the matter, he declined to do so, saying, “Because it’s an ongoing court case that we are not involved in, I can’t.” While Mercedes is not (directly) involved in the matter, it is certainly connected, so was this comment evasive or simply a non-denial? Equally, the documents contain serious but unsubstantiated allegations that Mallya solicited bribes from prospective buyers to facilitate a Plan A sale – he is said to have insisted on a minor shareholding so as “to be allowed an honourable exit” – with Uralkali suggesting (again unsubstantiated) that Stroll had ventured down this path and later refused to sign a waiver to this effect, citing “reputational risk”. Crucially, Mr Justice Miles made clear that he did not view “honourable exit” to be tantamount to soliciting a bribe. Although Racing Point initially refused to provide comment, telling RaceFans, “Racing Point is not party to the case and it wouldn’t be right for us to comment”, a personal spokesperson for Stroll subsequently said in a telephone call: “This lawsuit is between Uralkali and the former court-appointed administrators of Force India who oversaw the sale of the team in mid-2018. Mr Stroll is not involved in the case at all. “The unfounded allegations that have been made about Mr Stroll in court are not only untrue, they are based solely on what Mr Ostling, a director of Uralkali, claimed to have inferred from his own communications with Dr Vijay Mallya that there had been some form of bribe. Dr Mallya has also described the allegations as ‘nonsense’.” Image Unavailable, Please Login Uralkali believe Mercedes preferred Racing Point’s bid The Stroll camp further questions why Ostling had not directly raised this issue during the bid process. Uralkali’s submission closes with summaries of the relationship between Mercedes and Racing Point by outlining the ‘pink Mercedes’ matter, Wolff’s purchase of shares in Aston Martin – now controlled by Stroll – and a recent acquisition by Mercedes of a 15% holding in the ‘James Bond’ brand, taking its total stake to 20%. While Stroll hit back at the allegations, Mercedes has not (yet) done so despite its stringent corporate compliance regime. Intriguingly, a number of the allegations contained within court documents filed by both sides had previously been shared with RaceFans by independent sources. However, in true F1 style, much of the whole truth is unlikely to ever emerge. For the defendants, Crow told the court that Rowley had never promised to pick the highest bidder, stating that the overall package was crucial in order to ensure the best possible outcome for all interested parties. The barrister questioned: “Why expose Mercedes, the supposed puppet master, to the risk that someone else might win? It’s just nonsense to say [Rowley] did what he did to please Mercedes.” He did, though, submit that Mercedes may have initially preferred Stroll’s consortium, but eventually agreed to provide engines to whoever won the bid. The claims Mercedes attempted to influence the process must surely set alarm bells ringing in Stuttgart. In closing the case Mr Justice Miles said: “It won’t surprise you to know that I’m not going to give judgment now or tomorrow and I will take it away and think about it very carefully.” No judgement date was indicated by him, although sources suggest it was unlikely that the verdict would be delivered “much before Christmas”. As always with litigation it is impossible to call which direction it will eventually go, and an appeal is likely to follow whatever Mr Justice Miles decides upon. However, this matter perfectly encapsulates the high stakes at play in F1, with the acrimonious off-track machinations involved in what should be a straightforward purchase of a team clearly being as hard-fought – if not more so – as the contest for the world championship. But a lingering thought remains: Given the Haas prize money dispute, the ‘pink Mercedes’ barbs (tellingly, the team withdrew its appeal against the damning stewards’ verdict) and further controversies that have dogged Racing Point since August 2018, does Stroll not seriously regret his mid-stream switch from Plan A to B, without which Uralkali would have been saddled with the team and the very messy aftermath? https://www.racefans.net/2020/11/25/analysis-court-case-scrutinising-strolls-takeover-of-racing-point/
The 'cozy' Mercedes= Wolf and Stroll Sr relationship is far too close for anything. Raises immediate suspicion with respect to the case of the sale. Wolf will comment on Stroll as a 'worthy' driver to attempt to deny the consistent bad press about Stroll as a driver. Defense of Lance has zero place in the relationship. The Cloners are cheaters. Have been fined and sanctioned for that. Wolf needs to go back to worrying about his team and let Stroll's deal with their own mess. Daimler as an entity need ZERO from Stroll. Stroll and his team are a sideshow in comparison. If Cloner left the grid Mercedes would feel zero fiscal loss.
They appear to stay out of each others business. Toto makes it a point more than once to comment specifically about business with Stroll, defend Lance etc. Rather cozy. Watch your own house Toto.
Can’t make this stuff up, then Wolff ends up with shares in Stroll’s team and Stroll illegally uses Mercs cars repainted
They dont have Toto stepping in to direct which driver where or holding their hand like he holds Lance's LOL
No, instead they promote and demote drivers at will from one team to another. You're grasping at straws and you know it. I said it before: I don't have the slightest problem with teams feeding other teams. Ferrari did/does it with Sauber and Haas to a lesser degree. Merc does it now with RP and RedBull has always had 4 cars on the grid with different liveries. To believe that RedBull and Alpha Tauri are not one and the same when it comes to IP is naive. And I'm perfectly fine with that. In the old days (eg. Sixties) privateers were able to buy Ferrari F1 cars of the current season and participate with them. Nothing wrong with that. Nor should it be disallowed today. In the late seventies backmarker teams carbon copied the dominant FW07 and painted it in their livery. I'm good with that as was everybody else.
The idiot cheat team are well lectured by Abiteboul here ove FA inclusion in driver test https://www.autosport.com/f1/news/153976/abiteboul-slams-racing-point-over-alonso-test-criticism Renault Formula 1 boss Cyril Abiteboul has defended the decision to allow Fernando Alonso to do the Abu Dhabi young driver test - and slammed criticism from Racing Point as "ironic". The team has successfully lobbied the FIA for Alonso to be allowed to take part in what was originally agreed to be a test solely for young drivers. The one-off rule defining the test, introduced as part of cost-saving measures at the height of the lockdown earlier in the year, reads that drivers "must be in possession of an International A Licence; and unless otherwise approved by the FIA, not have competed in more than two F1 world championship races during their career." The FIA subsequently agreed that Alonso could take part, also giving the nod to Sebastien Buemi at Red Bull, and Robert Kubica at Alfa Romeo. The decision has infuriated rivals, notably Racing Point, McLaren and Ferrari, with the Maranello squad pushing for Carlos Sainz Jr to be included but the other two are missing the test, mainly because at the planning stages they did not have young drivers that they wanted to run. "I've got to understand the rules," said Racing Point boss Otmar Szafnauer. "I was surprised to see Fernando being allowed to test, so we have got to have that discussion with the FIA. I think the rules are pretty clear - it's a young driver test and a two-time world champion almost in his forties or in his forties to me isn't a young driver. "I've got to understand what the rules are first and foremost, and then see what we do thereafter." Asked about Szafnauer's comments Abiteboul suggested that Racing Point should take up the matter with the FIA. "There is an indication of young drivers, plus anyone that the FIA will give permission to," he said. "And that's in the absolute right of the FIA to do that, so if Otmar wants to build a claim against the FIA, that would be quite rich, keeping in mind that we will know that they have an illegal car. "We have accepted to settle that one. But if you want to have a go now at the FIA, I would find it quite ironic."
Sorry but this pathetic team does not deserve such a fine person and driver. Makes me sick to see Stroll Sr out there. Bug off!
Congratulations to team Racing Point for such a comeback performance after a horrific first Bahrain weekend. Well deserved third place in the WCC. Was great to see both drivers on the podium and the team celebrating. Loved every second of it. Normally I turn off the TV after the checkered flag but this time I stayed for the whole thing. Was beautiful to see them up there. Can't wait to see them reborn as Aston Martin, hopefully in less pink colors.
The case brought by Dmitry Mazepin's company Uralkali against the administrators of the Force India F1 team in the High Court in London has been dismissed Mazepin loses court battle over failed attempt to buy Force India Image Unavailable, Please Login https://www.autosport.com/f1/news/154224/mazepin-loses-court-battle-over-force-india-buyout
Kinda funny if it had been allowed. After all these years. Not very speedy those UK courts, aren't they?
https://www.bailii.org/ew/cases/EWHC/Ch/2020/3442.html "106. Mr Stroll told Mr Rowley that his primary motivation for acquiring FI was to give his son, Lance, a chance to leave Williams and race in a more competitive car."
Aston Martin negotiates with new title sponsor: Cognizant instead of BWT? James Bond is just not that cool in pink: If Racing Point becomes Aston Martin in Formula 1 in 2021, the team could also change the title sponsor (Motorsport-Total.com) - The plans of Lawrence Stroll and his consortium of investors to reorganize the Formula 1 team Racing Point for the restart as Aston Martin are progressing. Apparently, Sebastian Vettel's future racing team could also get a new title sponsor in 2021. The Racing Point team (then still under the name Force India) has been competing in the pink of title sponsor BWT since 2017. BWT is an Austrian manufacturer of specialty chemicals and systems for water treatment. Originally, at the end of 2016, BWT planned to sponsor the Mercedes works team in Formula 1 rather than Force India. The talks had progressed so far that graphic representations of a Mercedes silver arrow with a pink front wing and other pink elements were made. BWT was ready to dig deep into its pockets for a "pink silver arrow". In the negotiations, a sum of 50 million euros was in the room. In the end it didn't happen. The Daimler Group did not want a completely pink vehicle, and BWT did not go far enough with the compromise drawings. So you ended up with Force India, today's Racing Point and future Aston Martin works team. But just as a pink Formula 1 Mercedes was inconceivable for Daimler, pink probably does not fit the British James Bond luxury brand either. Intended, the Lance Stroll has betrayed to compete in the venerable British Racing Green. And could possibly get a few spots of blue color. Because according to information from 'Motorsport-Total.com' Aston Martin is now in advanced negotiations with a possible new title sponsor, namely the US IT service provider Cognizant. Cognizant was founded in 1994 as Dun & Bradstreet Satyam Software. The company employs almost 300,000 people worldwide, most of them in Chennai, India. It is currently not known whether an agreement with Cognizant would automatically mean the end of the partnership with BWT. https://translate.google.com/translate?hl=en&sl=de&u=https://www.motorsport-total.com/formel-1/news/aston-martin-verhandelt-mit-neuem-titelsponsor-cognizant-statt-bwt-20121604&prev=search&pto=aue
--The company employs almost 300,000 people worldwide, most of them in Chennai, India.-- So a green Force- India Stroll- Clone Racing.....................and a touch of blue!
