Good team… but what are the owners doing?

The Force India team looks to be in a fairly decent state on the race track this year, with the 300-odd staff at Silverstone hoping to continue to show well against much bigger teams. The team’s technology deal with McLaren has been significantly reduced this year as the team has switched away from a McLaren gearbox and transmission and will use the Mercedes powertrain, including the hybrid units, gearboxes and hydraulics. The team has its own wind tunnel located at the site of the old station in Brackley although there is no sign of any new facility. I believe (but am not 100 percent sure) that it still has access to McLaren’s simulators, test rigs and so on. It has Nico Hulkenberg and Sergio Perez, a very decent driver line-up, with money coming from Mexico as a result of the deal with Perez. On paper it is fine. In addition, there is a debt guarantee for $135 million given by Diageo Holdings Netherlands BV to Watson Ltd, the parent company of the team. This was given as part of the deal for Diageo to buy control of Vijay Mallya’s United Spirits. That transaction is being investigated by the Indian authorities but is currently going ahead. That is the good news, and the team should be able to survive with that money, TV money from FOM, and cash from Perez. There are also believed to be deals for the team’s test driver Daniel Juncadella, which will likely to be a reduction in the cost of the Mercedes deal. On the face of it, therefore, the team is fine for another season.

However, Mallya remains in difficulties in India as a result of the huge debts incurred by his disastrous Kingfisher Airlines, which in March last year was reckoned to owe an impressive $2.58 billion. More debt has been added since and creditors have been chasing him round in circles in India to try to get their money. The courts have allowed some of them to grab shares in his other businesses that were pledged, which means that his shareholdings are reducing in the key companies that make up his empire. Mallya is unlikely to ever be poor, but he may not be able to keep funding F1 in the long term. His partner Roy Sahara is in deeper and deeper trouble. Sahara acquired shares in the team after making a series of loans to the team, which were later converted into shares. Sahara himself seems to have little or no interest in F1 and has turned up at only a couple of events. The Indian authorities have been very interested in him of late and the latest news is that an arrest warrant has been issued in India for him after he failed to appear at a hearing. He can now be detained without the opportunity of bail until a hearing on March 4. The warrant was issued by the Supreme Court which is trying to make two of his companies refund $3.2 billion to investors.

To add insult to injury in recent days Bollywood actor Vindu Dara Singh, who was alleged to have been involved in an Indian Premier League cricket spot-fixing scandal last year, was recorded in a sting operation by media, claiming that Mallya was involved in scams that defrauded bookmakers by players in his Royal Challengers Bangalore cricket team agreeing to under-perform deliberately to allow the owner to win various bets. Singh said that the entire series is “100 per cent fixed”.

Oh my!