13/01/2010
NEWS STORY
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Yesterday's announcement that Virgin's Alex Tai is stepping aside as chief executive of Virgin Racing to be replaced by Manor's John Booth seemed innocuous but slightly unusual. It doesn't instil confidence when a team boss steps down before his outfit has turned a wheel, far less made it to the first race. If this move was planned all along then why was it not made public just as Tony Fernandes has confirmed that he will not be Lotus' permanent team principal?
It's not exactly a major concern you might say and you'd be right. However, on closely examining the situation, Pitpass' business editor Chris Sylt found that it raised far more important questions.
The big question which leads to all the others is why Tai was not replaced by another Virgin executive. If Virgin owns a significant stake in the team then you would have thought that it would need its investment represented on the board of the team by another of its executives and not someone who represents its co-shareholder Manor.
Then again, maybe Virgin doesn't own a stake in Manor at all, let alone a majority shareholding.
On 15 December last year, in the wake of Virgin Racing's official launch, BBC Sport did an interview with Virgin's founder Richard Branson and reported that "Branson told BBC Sport that Virgin had signed a three-year title sponsorship deal that did not involve any equity in the team. He added that Virgin had "lent the team some money."
So if Virgin does not have any equity in the team who does? Indeed, if Virgin does not own any equity in the team why on earth was Tai its chief executive? As a Sheffield-based UK company you would have thought that it should be easy enough to confirm the team's ownership from official filings but this is far from the case.
Manor Grand Prix is owned by three mysterious companies including the strangely-named WR Energia and Astra 100. None of these companies has yet to file any details of who owns them and Astra 100 does not even appear on UK company records so one can only guess where it is based.
Consequently, we are left wondering just who owns the team and why this is being kept a closely-guarded secret.
Longtime Pitpass readers will remember that in July last year this website reported on a leaked email sent by Alan Donnelly, the official representative of the then-FIA president Max Mosley. In the email Donnelly offered to facilitate meetings between a member of the Saudi royal family and a delegation from Manor.
"I will be in the Kingdom of Saudi Arabia and look forward to seeing you at our planned meeting...with representatives of Manor and Virgin," wrote Donnelly in his email, sent to the Saudi royal which had a sponsorship and investment agreement for Manor attached to it. This raises the question of whether the Saudi royal, or another party from the Middle East, did indeed invest in the team and, if so, why don't they want this to be made public.
One party which certainly owns a stake in the team is the private equity arm of the Lloyds Banking Group. Last month the Financial Times interviewed a senior executive from the bank about this and claimed that it has invested £10m in Virgin Racing.
Given that the UK taxpayer owns 43.4% of Lloyds Pitpass believes that it is the government's responsibility to reveal exactly where this public money is being invested. The fact that this has not been revealed so far by either Lloyds or Virgin leaves Pitpass wondering whether they believe that the public would not be impressed to find out who its co-investors in Manor really are.
One entity which certainly knows who owns Manor is the FIA since the team will have been required to send these details to the federation as part of the due diligence process when it applied for a grid slot. If Virgin is to be believed regarding the claim that it has no equity in the team then we are also left wondering why the FIA allowed it to be named Virgin Racing.
Sponsors' names usually precede the team name such as Vodafone McLaren Mercedes, they don't make up the name of the team itself and there is good reason for this. If the sponsor pulls out the team name will need to be altered leading to yet another change for the sport. F1's lawmakers are meant to seek to keep the sport stable which would not be the case if its talent change their names every couple of years.
Of course Benetton gave its name to its F1 team, just as Virgin is doing, but, crucially, the clothing company owned the team which gave it some stability and so it brings us back to the question of who owns Manor. The onus is on Lloyds or Virgin to answer the question and clear up the dark cloud that this shrouds them in.