The ownership of the Force India F1 team is rather complex at the moment. On paper the team is wholly owned by a Luxembourg-based company Orange India Holdings SARL. The last available records suggest that this is 42.85 percent owned by the Sahara India Group and 42.85 percent owned by the Mauritius-based Watson Ltd, a holding company belonging to Vijay Mallya. The remaining 15 percent is owned by the Mol family in Holland, who were involved in the team in the Spyker era. However, things are complicated by the fact that the spirits company Diageo, which controls USL, the Indian firm that Mallya used to own, gave Standard Chartered a bank guarantee worth $135 million for a loan facility for Watson. This defaulted on the loan in May last year and Diageo has since been seeking to recover the money, claiming shares in Orange India Holdings. The problem is that this process has been slowed by other creditors, fighting to get money from Mallya’s crumbling empire. The team stands to make around $70 million this year from the Formula One group, although some of that has probably been paid in advance, and the situation with Diageo is less than clear. Diageo wanted to get control of the team and rebrand it as Aston Martin, but it seems that there was too much risk involved for the British car company, which would love to be in F1, but has other priorities. There is money coming in from other sponsors, notably from Mexico, but the cynics in F1 believe that the announcement a few days ago that the team has signed a development driver deal with 16-year-old Nikita Mazepin was more to do with cash than talent. Mazepin is related to Dmitry Mazepin, a Russian chemical company billionaire.
The team has struggled with money a fair bit as a result of all of this but has done an amazing job in very difficult circumstances.
The latest twist in the story concerns Sahara’s Subrata Roy who has been in jail in India since March 2014 as the authorities wait for him to return money to investors. He has fought all along the way but has failed to sell his prize assets. The Supreme Court of India has grown tired on this game and so is now considering appointing a receiver and breaking up the group. This has caused Roy to ask the court if he can sell his F1 shares along with other assets, notably four planes and several luxury hotels. There are also reports that he has completed the sale of his flagship hotel, the Grosvenor House in London, to a Qatar government-owned trust fund. After paying the debts on the hotel, Sahara will be left with about $430 million. It is doubtful that Diageo would want to buy the team, but that really depends on the price…
Elsewhere the Indian newspapers have been filled with comments made at Davos by Raghuram Rajan, the governor of the Reserve Bank of India, who made a passing, but cloaked, reference to Mallya when discussing the state of some of India’s entrepreneurs.
“If you flaunt your birthday bashes while owing the system a lot of money, it does seem to suggest to the public that you don’t care,” he said. “I think that is the wrong message to send. If you are in trouble, you should be cutting down your expenses.”
This is viewed in India as being an attack on Mallya, who owes banks around $1.2 billion, but celebrated his 60th birthday recently in the only style he knows – ostentation.