Fernandes blames buyers for Caterham situation

By on Thursday, October 23, 2014
Caterham F1 Team

Caterham F1 Team

Tony Fernandes says Caterham Formula 1 team buyers Engavest SA did not comply to the conditions agreed when the squad was sold earlier this year.

Caterham's situation remains unclear after a series of accusations over the past 24 hours, with Engavest SA claiming that Fernandes did not transfer shares and then later insisting that they adhered to all of the conditions of the sale.

But Fernandes, who co-founded the team ahead of the 2010 season, has hit back and says that Engavest SA has not fulfilled its obligations.

"In June 2014, I decided, together with my co-shareholders, to sell my stake in the Caterham F1 team," said Fernandes in a statement issued on Thursday afternoon.

"We agreed in good faith to sell the shares to a Swiss company named 'Engavest' on the basis that Engavest undertook to pay all of the existing and future creditors, including the staff.

"The continued payment of staff and creditors was so important to me that I ensured that the shares would not be transferred to the new buyers unless they complied with this condition.

Sadly, Engavest has failed to comply with any of the conditions in the agreement and Caterham Sports Ltd has had to be put into administration by the bank, with large sums owing to numerous creditors.

"Our agreement with Engavest was very clear: there was no legal obligation to transfer the shares to them unless certain conditions - which included paying creditors - were met. Those conditions have not been met. Our lawyers have asked Engavest several times to comply with these conditions but they have failed to engage.

"If you agree to buy a business, you must pay its bills. They have breached that promise and now, sadly, it is others such as the employees and the fans of the Caterham F1 team that will suffer if the team ceases to race. I sincerely hope that this will not be the case and that a solution can be found."

Graham Macdonald, Caterham Group CEO, questioned the ambitions of the new buyers.

"The whole agreement with Engavest was based around a low consideration for the business, with easy payment terms so that creditors and staff could be paid," he said.

"The buyers were made fully aware at the time of all outstanding liabilities. However, it appears to me that they never had any intention of paying these liabilities. I go on to question how anyone who was interested in the long term future of the business would appoint one of their  cleaners – Constantin Cojocar – as the sole director and shareholder of the UK operating Company?

"We continue to see claims and counter claims from the F1 team which are totally unfounded. Not only have they failed to pay the creditors (and have even left our shareholders to pay some of the creditors on their behalf), but they have failed to pay us anything for use of our factory and site, or anything for the use our brand name.

"In short the new owners have paid us nothing and now the administrators have been appointed they want to walk away from their liabilities."


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