

The Caterham F1 Team will miss the next two Grands Prix after a financial crisis escalated into a bitter argument between the teams owners, new and old. Caterham Sports Ltd has been placed in administration with around £20m of debt and the entire team is now for sale.

The Caterham F1 team arrived in Formula 1 in 2010 (as Lotus Racing) under the ownership of Malaysian businessman Tony Ferndandes. It met with all expectations in its first two seasons beating its rival new teams Marussia and the Colin Kolles run HRT. After a failed attempt to take over Group Lotus Fernandes acquired the Caterham Group and rebranded his F1 team.



Aside from the odd strong performance the team remained firmly anchored to the back of the grid, roughly a second off the pace of the slowest midfield teams. Ferndandes was getting fed up and at the start of the 2014 season he demanded that the team improve, but if anything the team took a backward step. The ugly CT05 was rolled out at Jerez and struggled for pace from the off, when rival team Marussia scored points at the Monaco Grand Prix the situation worsened and Fernandes now more interested in his Premier League Football team put Caterham F1 on the market.

In late June a sale was announced, a consortium of Swiss and Middle Eastern investors ‘advised’ by Colin Kolles and trading under the name of Engavest SA were reported to be the buyers. New management took charge immediately and by the British Grand Prix former Dutch F1 driver, Christijan Albers, assisted by Manfredi Ravetto, took over the day-to-day running of the team, reporting directly to the board and replacing Cyril Abiteboul left the team to join Renaultsport F1.

Christijan Albers said following the sale that ”We are aware of the huge challenge ahead of us given the fight at the bottom end of the Championship and our target now is to aim for tenth place in the 2014 Championship. We are very committed to the future of the team and we will ensure that the team has the necessary resources to develop and grow and achieve everything it is capable of.”

Around this time the team fired around 40 employees on the spot, sparking an as yet unresolved legal challenge for unfair dismissal.



Updates finally started to appear on the car and things gradually started to improve but just a few weeks after his appointment Albers quit the team, leaving Ravetto as team boss. He admitted that the team was in difficulty from the outset, and suggested that had his employers not stepped in the team would possibly not have been able to race at Silverstone.

‘The new front wing and car updates are delivering more aero performance, we delivered that. Technically talking we have delivered an almost new car since Spa, it does not even look like the shit box they started the year with’ Ravetto told Racecar Engineering some weeks later. ‘But I’m not saying that the patient we are trying to treat is out of danger. We took over a patient that was almost dead, we have tried with some success to keep him alive. The next step is to try to stabilise things but thats not completed yet and the patient stays critical.’

So it was until the build up Japanese Grand Prix at Suzuka, when a group called the ‘The Sheriffs Office’ arrived at the team headquarters in Leafield, England and seized a large amount of the teams property and equipment including spare parts for the cars running in the Japanese and Russian Grands Prix. Staff on site were told to switch off laptops and leave the factory at 1530hrs on the 1st October. They were then advised to return to the site at 9am on 2nd October (Thursday) for an update on the situation.

The Caterham F1 Team press office issued a very specifically worded statement – ‘There have been unfounded and unsubstantiated rumours concerning actions against 1MRT, the entrant and owner of CaterhamF1.

An action was threatened yesterday against a supplier company to 1MRT. This company is not owned by 1MRT and it has no influence over the entry of CaterhamF1 or the entrant.

Also contrary to uncontrolled rumours, all operations are currently in place at Leafield and the race team is doing its preparation in Japan.’

But in reality only a skeleton crew had been sent out to Suzuka, and many faces normally expected to be seen in the team garage were absent, and some of their racing spares were locked up in a secure location.



The statement from the team was accurate in that there was no action against 1 Malaysia Racing Team (1MRT) rather the action was taken against Caterham Sports Ltd, which had run up a huge amount of debt from suppliers. Caterham Sports Ltd is the company that essentially runs the F1 team for 1MRT, it designs, builds and maintains the race cars, operates the team website and employs the majority of the technical staff. When Engavest acquired Caterham F1 (in the form of 1MRT) Caterham Sports Ltd was wholly owned by 1MRT.



The assets seized included the the teams simulator, a 2013 chassis used for rig testing, pit equipment memorabilia and crucially a large number of non critical spare parts for the race cars. Divided into at least 90 lots the seized assets were to be sold off at auction. Listed in the auction catalogue are many items which includes shirts and caps, nuts and bolts, various 2014 car parts, machine tools, a Faro arm and a 2010 T127 steering wheel as well as the simulator and rig test chassis.



During a hastily arranged press conference in Japan Caterham F1 team boss Manfredi Ravetto claimed that no key components and equipment were taken; “I say additional to what was previously removed. But the things that were previously removed were just memorabilia or something. Again, not belonging to the Formula 1 team.” However the images released by SHCE show an Ansible Motion S1 simulator fitted with a GP2 chassis. This could not be considered to be ‘memorabilia’ as it is a state of the art tool.

As running got underway at Suzuka SHCE Ltd (The Sheriff’s Office) announced that auction of goods has been placed on hold pending the outcome of a further court hearing.

‘They had to take the Auction down because some of the items listed were not owned by Caterham sports’ Manfredi Ravetto told Racecar Engineering. ‘We have zero to hide’.

But in reality the auction was halted because another creditor, Cromwell Tools had asked a court to wind up Caterham Sports Ltd (CSL) over unpaid debts and court judgements.

It later transpired that Caterham Sports Ltd has over 50 judgements against it totalling almost £1,000,000. It was just the tip of the iceberg. The Cromwell tools hearing was due to be heard on the 11th November and the items seized could not be auctioned off until then.

But with Caterham Sports employing the staff it could become difficult for the team to operate, it seems this was realised ‘CSL Employed the staff, employed. But this company is not belonging to 1MRT, 1MRT is the entrant. I don’t know how often companies house updates the ownership but it has changed. The ownership has changed during the re-structure, it has been sold to somebody who was working for a different project. Its now entirely separate company, but its still in Leafield and thats the problem, it is not just those companies there there are also many other companies belonging to Tony Fernandes which we have nothing to do with that are there’ Ravetto added. ‘I think it was a big mistake that we did not make a physical split on day 1 but people, the staff, were confused and frustrated about their destiny that we thought that it was too much to ask them to move facilities. The salaries of the staff are paid by 1MRT.’

Team members confirmed to Racecar Engineering that their most recent salaries had been paid by 1MRT and not CSL, the first time this had happened but they had no other indication that they were now working for another company.



It seems that CSL had indeed been separated from 1MRT, likely in an attempt to distance the F1 entrant from its debt ridden sister company. “CSL was sold to Romanian investors” Colin Kolles told the German press, though during that time his father was a director.

The situation saw the Caterham Group (which produces the popular road cars) and still owned by Tony Fernandes distance itself from the Formula 1 team stating –

“Caterham Group wishes to clarify that, following the sale of the F1 business in July, it has no affiliation with Caterham F1 Team. The Caterham brand name is in Formula One as a result of the Group’s former ownership of the F1 team and is being used under licence. The Caterham Group is concerned about the negativity that these circumstances, which are outside of its control, have on its brand and will continue to monitor the situation.

Caterham Group now consists of Caterham Cars, Caterham Technology & Innovation and Caterham Composites; the F1 team is now run by an unconnected consortium of Middle Eastern and Swiss investors, following its sale earlier this year.”

The team raced at Suzuka and again in Sochi without great incident or result. Though in the latter race one of its cars driven by Kamui Kobayashi was apparently retired to save mileage and a failed element in the suspension had to be repaired rather than replaced as the required spare parts were languishing in a debt collectors warehouse.

Kobayshi was understandably unhappy with the situation “Scary!” Japanese driver wrote on his Facebook page. “Last night a suspension defect was found. There’s no spare so it was repaired by wrapping it in carbon. It’s checked all the time but, even so, being asked to race like this is too scary! I want to go home already. From here on there are still practices and the race to go. I’m seriously troubled. As a racing driver, should I drive? Should I safely decline? I drive again in 15 minutes…”



The post was later pulled and the team countered that the car had been run in a safe condition “After Friday practice at the Russian Grand Prix, the team performed the standard checks on the cars and we noticed a small inconsistency on the left rear suspension of Kamui Kobayashi’s car,” read a team statement. “It was extensively evaluated at Sochi and Leafield and ultimately a carbon fibre wrap was applied to provide additional reinforcement – a normal procedure. The component was signed off as safe and re-checked between each subsequent session, to be absolutely sure there was no issue.”

Kobayashi retired from the race and has been quoted as saying that it was as result of the team wanting to save mileage on the car.

“The fact of Kamui having to retire from the race has nothing to do with the above,” concluded the team statement. “We saw an issue on the brakes – a problem that Kamui had already reported on Saturday during FP3 – so we decided to change them, but the problem persisted so we decided to stop.”

Following the Russian Grand Prix there were apparently fears that if the cars were returned to Leafield for their required overhaul ahed of the Grand Prix of the Americas they would also be seized, so arrangements were made for them to be shipped to the Kodewa facility in Greding Germany, owned by the Kolles family. Romulus Kolles was made a Director of CSL after the Engavest take over of 1MRT. That plan was changed and the overhaul of the cars would take place in Austin ahead of the grand prix after the cars had been repainted (a normal process) at Leafield.



But things had developed in England, Romulus Kolles and the other director of CSL had resigned and the new sole owner of CSL, a company with debts in the millions of pounds and up to 200 employees was a man called Constantin Cojocaru, he had been the factory cleaner. He had also been a top professional football player in the 1980’s scoring goals for his national team at under-21 level and scoring two goals for the famous FC Steaua Bucharest team in the 1987/88 season.

In an interview with leading Romanian Sports website Prosport Cojocar reveals how he came to be the boss of CSL.

‘I came to England in August to find work, cleaning or working in a warehouse’ he explains. ‘I left Romania because I had financial difficulties there. I had bills to pay and as the Chief of a bus depot in Brasov I was paid less than 200 pounds a month. After I finished my career as a footballer everything was grim. I had no money and nobody wanted to help me starting a coaching career. My former room mate during training camps Gheorghe Popescu promised to help me but he didn’t. The only one who really helped me was George Becali (the owner of Steaua Bucharest who is currently in prison). I told him: ‘Gigi, help me please. I’m hungry. Every time he offered me money. Finally I gave up. I was ashamed to ask him any more help.’

Cojocar put his CV online and asked for £1,000 a month to work and found a job as a general cleaner at the Caterham F1 team. From pictures he has released it seems he liked his job. Then one day everything changed.

“An Italian (likely Ravetto) a kind of an owner here at Caterham recognised me as a former football player. He told me: “It’s absurd for you to clean the floors, you are a known footballer. From now on you are a director here!” And I was appointed as executive director at Caterham Sports Ltd.”

Cojocar goes on to state that he feels up to the challenge of saving CSL from administration but refused to speculate on the chances of actually succeeding. But crucially he highlights who he is actually working for (even if indirectly). “I represent the interests of Kolles, he offered me this chance. There are some serious problems here. I have to remain here right now I have no other choice. Once you enter the game you have to play it. Right now I’m in Germany, in Munich, at the main company who bought the team headquarters.”

Kolles-Kodewa is based a little to the North of Munich.

The full interview (in Romanian) can be found here (Constantin Cojoacar Q&A)

Cojocar then contacted the court in order to put the company into formal insolvency, but his request was vacated and a separate administration request from a Malaysian bank called EXIM was accepted. But Cojocar’s legal documents contained some fascinating hints at a wider plot, he claims it was his intention for CSL to design and build the cars for the new Colin Kolles ‘advised’ Forza Rossa Racing team.

Smith & Williamson a London based firm was appointed as administrators of CSL, and entered into negotiations with 1MRT to see whether the previous arrangements could be continued in order to keep the business trading and ensure that the creditors are paid.

“Positive discussions were held between the administrators and the team manager, Manfredi Ravetto, and also with the financial backers of the team on Friday 17 October and it is hoped that these will lead to a financially acceptable arrangement for the continuation of the relationship between the Company and the F1 Team” a statement read following the appointment of the administrators. “’If a financially acceptable arrangement cannot be agreed between the administrators and the Caterham F1 Team the administrators will then enter into dialogue with other interested parties with regard to a sale of the business and assets of the Company.”

Cojocar indicated in court papers that there was an intention that his (un-named) associates would provide funding of £2m per week which would be used to pay the Company’s creditors. “Unfortunately, the money promised by his backers did not arrive. He has further indicated that due to the non receipt of these monies he had no choice but to request the court to put the Company into administration. The administrators’ immediate plan is to continue their efforts to maximise the value of the business and assets of the Company for its creditors.”

As negotiations continued the talks began to break down and the owners of 1MRT, the Swiss-Middle eastern group operating under the Engavest umbrella claimed that they were not the owners after all and that the team remained the property of Tony Fernandes.

“The Seller has refused to comply with its legal obligations to transfer their shares to the Buyer. The Buyer has been left in the invidious position of funding the team without having legal title to the team it had bought. This is in total contradiction to the Seller’s press release of 3 October 2014 which stated that Mr Fernandes and his Caterham Group had no longer any connection with the Caterham F1 Team.

The administrators of Caterham Sports Limited have been appointed on behalf of Export-Import Bank of Malaysia Berhad (Exim), a creditor of Mr Fernandes and the Caterham Group. The Buyer has no connection with Exim. Caterham Sports Ltd was a supplier company to the Caterham F1 Team. Very regrettably, the administrators’ appointment has had devastating effects on the F1 Team’s activities. Since their appointment, the administrators have released various press statements which have been severely detrimental to the management of the Caterham F1 team.

After three months of operating the Caterham F1 Team in good faith, the Buyer is now forced to explore all its options including the withdrawal of its management team. Lawyers have been instructed by the Buyer to bring all necessary claims against all parties, including Mr Fernandes who, as an owner, will run the F1 operation.”

Tony Fernandes tweeted the following regarding the situation ‘If you buy something you should pay for it. Quite simple’ suggesting that the Kolles lead group have failed to pay for the acquisition.

After the statement was issued employees at Leafield leaving work for the day had their cars searched by private security contractors hired by the administrators. Reportedly a number or former elite British Army soldiers in their ranks. The factory was then locked down by the security and the staff have not returned, and the cars seem unlikely to make it to the next grand prix.



Tony Ferndandes refuted the claim made by Engavest that he has not complied with a legal obligation to transfer his shares to the new owners. “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 (the UK operating company of the F1 team) 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 added:

“We genuinely believed, at the time, that the sale of the team was the best route for the staff and creditors of the Company, as we felt it secured its long term future. 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. 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.”

The argument began to play out in the press, with Engavest repeating its claims that Fernandes is at fault adding that ‘Incidents such as a Caterham Group representative forcibly breaking into a filing cabinet containing our private and confidential documents and the continued refusal to deal with the outstanding loan of Exim Bank and complete the agreement has culminated in Engavest’s total comtempt of Mr Fernandes and his Group executives with whom we entered a deal in good faith. Every single condition precedent of the Sales and Purchase Agreement for which Engavest was responsible has been met. All salaries have been paid. Engavest sold CSL. It did not appoint Mr Cojocar.”

The group of 40 employees who were released from their contracts with no notice following the acquisition of the team claim that they were not paid their July salaries which remain outstanding.

The statement made by Engavest does raise the question of who did they sell CSL to? Cojocar is said to be the sole director and shareholder, but he claims that he was appointed by Ravetto (an Italian) or Kolles.

But there does seem to be an over riding agreement that the shares of 1MRT were never transferred, leaving Tony Fernandes the owner of the team of 1MRT, and in theory CSL as the shares in that company were not Engavest’s to sell.

The current situation now sees the administrator in full control of the Caterham F1 team and Bernie Ecclestone has given permission for the team to skip the next two races. The entire team is now for sale as a going concern, complete with F1 entry, cars, intellectual property and staff.

“Purchasing the assets would give the buyer ready access to F1 racing” the administrators claim in a statement “in a telephone conversation today between Finbarr O’Connell and Bernie Ecclestone, Mr Ecclestone agreed to support the administrators in their wish to sell the Formula 1 team to a party with the financial strength to sustain it into the future. Mr Ecclestone also agreed to give dispensation to Caterham F1 such that it could if necessary miss the U.S. and Brazilian Grands Prix but hoped that a new owner would be in a position to race the team at the Abu Dhabi Grand Prix. Colin Kolles, the previous principal of the team offered today to hand over management control of 1MRT to the administrators. Lawyers for the administrators and Mr Kolles are currently working on the paperwork to effect this transfer.”

The administrators have already been contacted by a number of interested parties expressing a wish to buy the team and they hope that a transaction with an operator of substantial financial means can be concluded in the next few weeks.

“We believe this arrangement gives us a much better chance of being able to reach a better conclusion for the racing team and its creditors.

“While this is a great step forward in making the whole team and assets more attractive, there is no need for the staff of 1MRT to return to the Oxford site in Leafield until a sale of the Formula 1 team occurs.

“This is a difficult situation which is not of our making. We regret any personal impact on 1MRT’s employees. As administrators for CSL, we are seeking to maximise the outcome for its creditors and other stakeholders.”

Further reading

Caterham CT05 Technical analysis

Colin Kolles acquires Caterham

Force India vs Lotus (Caterham) court judgement in full

Lotus (Kolles) and Adess AG in legal scrap at Le Mans