I cannot say that I like to have such a headline because it is not good for the sport to see high profile people, particularly F1 team owners and members of the FIA World Motor Sport Council, in such situations. However, the reality exists and I believe those who are employed by the person in question should know what is happening.
Not wishing to be accused (again) of racism for reporting about Vijay Mallya’s alleged misdeeds, I am going to reproduce a part of report that has appeared in the Indian media in recent hours.
The country’s largest lender, State Bank of India (SBI), has approached the Debt Recovery Tribunal (DRT) seeking the arrest of Vijay Mallya in a bid to recover loans to Kingfisher Airlines, which was promoted by the liquor baron. SBI also wants his passport impounded and a complete disclosure of his personal assets. The move comes after Mallya struck a $75-million deal with Diageo to exit United Spirits. He had also indicated that he was likely to relocate to the UK. SBI leads a consortium of 17 lenders to the grounded Kingfisher Airlines, which has defaulted on loans worth Rs 7,000 crore. According to sources, SBI has sought to secure the lenders’ first right on Diageo’s payout to Mallya.
For those who are not familiar with the word crore, it is an Indian measure not used in the West. The sum of 7,000 crore rupees, is equivalent of something in the region of $1 billion.
joeblogsf1 
As an Indian I find Mallya’s behavior, lifestyle, arrogance disgraceful and not too many people will feel sad for him right now.
7,000 Crore = 70,000,000,000 (70 Billion).
i.e. S**tloads.
I know this is probably not a simple question, but where does the money to keep the F1 team running come from exactly?
Yes – 70b Indian Rupee.
Which is approx 1b USD or 700m GBP.
This number dwarfs the big team’s annual budgets!
Martin,
The amazing staff at Force India (the team not VJ) somehow, miraculously keep the team not only running but very competitive on the smell of an oily rag. Some money (a lot by my standards) has been an advance from Bernie, without which they would not be there.
It’s exasperating. Fit and proper tests for F1 owners required.
+1 to that
“Fit and proper tests for F1 owners required”
Not the answer. Football employs such a test. It didn’t stop a certain Italian individual called Cellino taking over Leeds United Football Club. Since he took over, which is only within the last 2 years, I have lost count of the number of managers that have passed through the doors (5? 6? more?!). He’s been found guilty of tax evasion more than once and has been banned from the day to day running of the club on several occasions for periods of time. Result? He still owns the club and he still runs it, although for all intents and purposes he’s unfit to run it for his tax offences alone. A waste of time.. And I have absolutely zero confidence that F1 would handle the situation any better than the FA would.
Fit and proper tests in UK football don’t work. Everywhere in the world and in all spheres of life, it is hard to find men and women who have the guts to address power. Some rich people who own F1 or football teams are accustomed to giving orders which are obeyed; others are decent and reasonable. Wherever you look, whistleblowers get a rough deal.
I don’t know whether Colin Chapman would have passed a fitness audit in 1982. A UK judge reckoned that there was something wrong about Lotus Cars and DeLorean. Team Lotus (the F1 team) was a separate business and it would be entirely wrong to question the morals of team members.
Can we add a fit and proper test for the owners of F1 also?
Vijay sings from the same hymn sheet as them when it comes to the culture of F1. That culture is greed.
VJM is passionate about formula 1 (I think) and Bernie has a soft corner for him . So he is perceived to be a good owner, “fit and proper tests for f1 owners ” if in place would find him fit and proper
Yeah, I guess it was expected that after receiving some money (or future cash flow) and telling the world about wanting to move to the UK, the banks being owed would do their best to prevent him leaving the country with bags of money.
The questions that goes begging to be asked is why did he broadcast his intention to leave in the first place?!
Hello Joe, there have been reports of an UK government investigation into the collapse of the Caterham F1 Team. Can you shed any light on this? I ask because I enjoy reading your blog but I have thought you slightly anti-Force-India and ‘easy’ on Caterham when they were around 🙂
There is talk of some kind of look at what happened, but I have not heard any details. I will look into it. Certainly it was a messy business and there were lots of unhappy people at the way in which it happened.
When the auction happens, going to try and get the yacht, at a good price.
There should probably be a catalogue of other good stuff.
Will miss interviews with VJM on SKY, from the paddock.
Well 7,000 Crore rupees doesn’t sound so bad….. Oh wait
Joe please don’t let the morons who cry racism put you off reporting on Mallya or saying what you really think. Reporting negatively on a person due to his actions who also happens to be Indian is very different from reporting negatively on all Indians. People who can’t make that distinction are the problem not you, I’d suggest in future sending them a link to the definition of racism because I’ve never seen anything in your writings to suggest even a hint that you’re a racist.
+1 – Joe is not a racist, end of.
Completely agree! You just report facts in your brilliantly witty style and would hate to see you change that that. How can you help it if the 2 most prominent Indians associated with the sport at the moment are in trouble; Roy Sahara (already in prison) and Vijay Mallya. Your reporting style is going to ruffle feathers as you well know but that (obviously along with your ridiculous inside knowledge of what is going on in F1) is what makes your blog so compelling and keeps us coming back so ignore the haters. You could just have easily have been branded as racist against Italians for your coverage of Ferrari’s “secret” deals and powers agreed with Mr E, in fact they could say you were being ageist for your comments about Bernie, but we all know that’s a load of rubbish.
Also just noticed my GP+ sub auto renewed!!! Looking forward to the first installment
Craig,
Haven’t you read Joe’s comments about Ferrari, Alonso, oh and the French, he hates them sooo much he lives there.
…and have done for 25 years
It’s about time the hammer come down hard on Mallya. His arrogant life style, laughing at the thousands of employees he owes untold amounts of unpaid wages, is disgusting. What that man deserves, well, that is not suitable for print on a respectable blog such as this.
Joe – keep up the stellar work. Your recent piece on David Bowie is a work of art.
Off to meet Penelope (Agnes Scott) for tea.
A billion here, a billion there, and pretty soon you’re talking about REAL money!
Thank You for reporting on this. People forming a part of the global fan base of F1 needs to know how corrupt and brazen certain people are. And how they are certainly celebrated by the F1 circus especially it supremo Mr. B. The situation is quite disastrous as various Indian banks did not even do any proper checks while giving him the loans and some banks even converted the debt to equity while the share price was falling to give him debt relief. His extravagance is such an eyesore that the head of the Central Bank, Reserve Bank of India governor had to indirectly rebuke him in public. But such is the case with sports in general that the more corrupt you are the more Mr. B and the CVC love them. Case in point VJM, Putin, Bahrain, Baku. When will we have those days when sporting will be celebrated instead of the money and corruption of the people and countries.
Dear Joe, all
Well, just in case he hires sufficient silk to extricate himself from the financial stuff, charge him for crimes against hairdressing…..a conviction for that is a lay down misere:-)
Cheers
MarkR
When tomorrow I’m gonna tell this to my colleagues we certainly will betting: Mallya or my (soon to be ex-)boss will be on the run from the authorities longer. :-$ Can not describe my feelings…
If the loans were made to the airline, which presumably is some kind of limited company, then how can Mallya be personally responsible? If they could go after his personal assets that would void the whole concept of having limited liability companies which would be even more worrying than a shady figure in F1 …
I believe Mallya gave personal guarantees.
Let us see what happens next. There is no point in guessing.
Dear Joe,
I am mortified that racist is mentioned in association with your name! I really get annoyed with ignorant fools that resort to that type of defense when the people that they have sympathy with are on a very slippery slope! I have enjoyed your reporting of the demise of VJ, at all times you have been ahead of the pack and only used information from the public domain, there has been no journalistic licence used, just great reporting!
I was accused of being a racist myself in a meeting in January, I had exposed the accuser as a fraud, liar and a cheat, he then fired the Racist bullet at me, I was so enraged my reply was quick and colorful! (Children do not read the following): “I strongly object to your ridiculous accusation, I don’t care about your race, color, creed or religion, a twat is a twat!
Keep up the great work and your Journalistic objectivity!
I’m surprised that Vijay would consider relocating to the UK as we have extradition arrangements with India though they would have to convince the home secretary to sign the papers. Maybe Monaco would be a better bet – all the f1 drivers could put in a word for him 🙂
PB said: “I don’t know whether Colin Chapman would have passed a fitness audit in 1982. A UK judge reckoned that there was something wrong about Lotus Cars and DeLorean.”
IIRC the judge at the time of the hearing, which was after CC’s death, said that if he had been alive he would have almost certainly have gone to prison.
A bombshell at the time but sadly, in these times, just another ripple on the sewage.
Robert, what has Colin Chapman done that would put him into jail? I know that he didn’t enter Italy for years because he was afraid they would jail him for killing Rindt. But something wrong about Lotus Cars? A tax issue maybe?
The details of the transgressions I can’t remember but it was to do with the money given to CC and DeLoren to build a car factory in Northern Ireland to build the stainless steel cars as used in the film(s) “Back to the Future”.
CC basically used UK taxpayers money to fund either Lotus Cars, the F1 team or both. From Wikipedia: From 1978 until his death, Chapman was involved with the American tycoon, John DeLorean, in his development of a stainless steel sports car, to be built in a factory funded by the British government. Approximately £10 million of British taxpayers’ money, equivalent to £40 million in 2010, went missing. The original concept design was for a mid-engine sports car, however difficulty in securing the original Wankel engine rights and design complications led to the rear-engine mount design. This concept would later be sold to Toyota and go on to become the AW11 MR2.
Chapman died before the full deceit unravelled but, at the subsequent trial of Fred Bushell, the Lotus accountant, the judge insisted that, had Chapman himself been in the dock, he would have received a sentence “of at least 10 years”.
I thought the issue were the engineering invoices being sent to DeLorean by Lotus which totaled close to $23M and which were paid by the British taxpayer with the money being sent off to Panama instead of paying down *real* engineering charges?
It was shown in court that the money was to be split three ways between JD, CC and Fred Bushall. FB (Lotus accountant) was the only one of the three to spend time in jail over this issue. DeLorean died poor but not convicted for either the DMC fraud charges or the FBI drug charges. The allegation(s) was that DMC invoiced for work by Lotus on the DMC 12 and that this work was grossly over inflated or not done at all and that these payments were not deposited to DMC accounts, but instead sent to a private account(s) controlled by these three individuals.
It was never proven that the payments made to CC (his take) were ever used to keep Lotus F1 team in business as there was never a paper trail found that showed this financial support from these offshore accounts to the team. Is this ‘theory’ of Lotus financial support from these funds a romantic ‘story’ a retro burnishing of Chapman’s legacy by his fans? I can’t say.
After the fallout over the bankruptcy of DMC, the UK receivers could find only a few million of the funds – the rest washed through Swiss accounts and then landing in Panama ‘disappeared’. Bushall was found to have set up these accounts. DeLorean admitted that *some* of the money was under his control but was a ‘loan’ by Colin to buy a company in Utah for the two of them. As CC had now died – there was no evidence to dispute the ‘loan’ story he gave.
After the fact, Anderson Consulting was taken to court by the UK Government and sued over the fact that they certified the books at DMC and these ‘loans’ and secret payment transfers were not listed on the books. There was a settlement made after a protracted multi year lawsuit (over the whole DMC debacle) but much of money has never recovered. It is not known how much if any of the Lotus/DMC $18m was recovered as the master settlement is secret.
All three actors in this sad drama (Lotus/DMC) are now deceased and Arthur Anderson was dissolved after many other poorly done audits, (I’m being generous) most notably, Enron and WorldCom to list the worst of their disasters. Scaled up to 2016 dollars, the DMC fraud makes Vijay look like an amateur.
Thanks for being on top of this story from the start. Let’s hope Vijay is suitably tried and punished. His behaviour is disgraceful, and I don’t care what nationality or race someone us, if they cheat people and thrive on avarice they deserve to have the rug pulled out from under them. On one hand I find it shocking that he has held a seat in parliament, on the other it would seem par for the course in some instances.
For the record I am one of the many posters who doesn’t think Joe is racist, and I have a pretty sensitive radar to these things, am generally quick to jump. I think a lot of people need to do some revision on what racism constitutes, but then I also believe people need to read up on socialism before throwing that term around as well.
Thanks for continuing the investigative journalism Joe. It is a bit of a lost art in general but it is continually refreshing to see you get a bit of dirt under your nails as you dig deeper into a story.