[HxCas]

Hi, I just figured I’d drop by and link this interesting post by GregEvangelista on reddit who did a little background digging on Quantum.
http://www.reddit.com/r/formula1/comments/1qqqjz/why_the_lotus_deal_is_a_fantasy_who_are_quantum/
I hope things do go through for Nico’s sake but this doesn’t give me great confidence. Thoughts?

[Dion]

I read it back when it was first posted, since I frequent the formula1 subreddit.

I don’t really know what to think about it… If it were to be true that this is all just a big con, why doesn’t Lotus know about this? Is it too hard to check the background of their sponsors?

If it doesn’t however, that’d be great. If it just takes some time to get some final paperwork straight, after which they’ll be relieved of their monetary problems, it is most certainly worth the wait.

I try to hope for the best, because I just can’t bare to see Grosjean and (possibly) Hulkenberg’s future being ruined by a fraudulent “Investment Company”.

[Prisoner Monkeys]

If it’s true, it wouldn’t be the first time a team turned to a charming psychopath out of financial desperation.

Remember Zoran Stefanovic? He somehow convinced Toyota to give him two unraced TF110 chassis and even tested them with Kazuki Nakajima and Jacques Villeneuve, despite the way the aerospace engineering company he owned had no assets except 500 Euro in a bank account and a shipping container full of collapsible picnic chairs that he sent to Bahrain as vital technical equipment.

And then there was QADBAK, a mysterious consortium of British middle-men representing Middle Eastern investors looking to save Sauber when BMW pulled the carpet out from under them in 2009. They were heralded as the saviours if the team until it was discovered that QADBAK was registered in the British Virgin Islands to a known con artist.

And in the 1990s there was an ironically genuine Nigerian prince (he had a legitimate claim to a hereditary title of some kind) who bought into one of the backmarker teams (I forget who) until it was found that he did not have the fabulous wealth he claimed to.

If the Quantum deal is a hoax, it’s unlikely to affect the team. After all, Formula 1 is so expensive that no con artist could ever hope to make money from them. No, Lotus would be a means to an end: the con artist would use them to generate interest in his investment, but the money would never get to them.

If it’s a fraud, the only person it affects is Nico Hulkenberg, unless he could find sponsorship to compete with Sergio Perez or Pastor Maldonado.

[Nick]

@prisoner-monkeys You’re thinking of prince Malik, who promised Arrows some investment in 1999 through a vague ‘t-minus’ brand. Once nothing materialized, the stickers disappeared, as did Prince Malik.

Honestly, that’s what Quantum reminds me of right now, Qadbak or T-Minus.

[Prisoner Monkeys]

@npf1 – Thank you. I wanted to say it was Jordan who fell for it, but they were competitive at the time. It doesn’t surprise me that it was Arrows, given the way Tom Walkinshaw handled the team.

Anyway, both Lotus and Quantum insist that the deal is on and that the money just needs to arrive. Giving everyone involved the benefit of the doubt for a moment, I would hazard a guess to say that the money will not appear until after the season formally ends. The deal supposedly clears Lotus’ debts, which will continue to build up until the end of the season.

There may also be a cultural element involved here that could explain the presence of Ijaz. Formula 1 is a very westernised sport, whereas the money from Quantum is coming from the Middle East and Brunei. We rarely see the handful of Middle Eastern investors attend races, even the ones in Bahrain and Abu Dhabi. So it’s possible that the investors in Quantum hired Ijaz to be the figurehead, someone who could cross the cultural divide and satisfy the business sensibilities of all involved.

And it’s worth noting that the Sultan of Brunei recently implemented sharia law in Brunei. The penalties for theft are not to be taken lightly.

[GeeMac]

I did read that article and there is some interesting stuff in it. However, the author does seem to lack a basic knowledge of how international finance deals are done (and there is no getting away from it, this is one). If he thinks that it is simply a case of Mr X going to Company Y and saying “Hey buddy, I want to pay you X million dollars for 35% of your F1 team, we know you need the cash to help you gain 0.00000001 of a second a lap so you better take our cash now or else we are going to fund Company Z instead” he has another thing coming.

I’ve spent the vast majority of my legal career working on major international project finance and banking transactions and I can tell you that the use of “shell companies solely for the purpose of taking the loans” is common practice. It is such common practice that he should have just used the trade name for such companies (“SPV’s” – special purpose vehicles). Setting up companies like this is used primarily to make structures “tax neutral” because, believe it or not, these deals attract massive tax consequences if not structured properly and companies hate paying tax if they don’t absolutely have to. Setting up companies and transactions like this also contributes significantly to the economies of places like the Cayman Islands, British Virgin Islands, Jersey, Guernsey, Delaware and many others. He also doesn’t seem to grasp that when you are dealing with sums of money like this deals get complicated and people move slowly to make sure they aren’t taking unnecessary risks. I have worked on deals with values ranging from a few hundred thousand dollars to several billion dollars and they are all painful at times believe me. I have no doubt that Lotus and Quantum’s lawyers are trawling through the documents for this deal as we speak, fine tuning them in the same manner the mechanics fine tune the cars before races (though they are probably arguing over things like commas and full stops and where the word “reasonably” goes in a sentence rather than changing a driver’s damper settings, which seems far more exciting to me). Doing things like checking with regulatory authorities and checking institutional frameworks and procedures is boring, but it needs to be done as part of a due diligence exercise. We all know the public face of Team Enstone, they are one of the sports top teams, but I guarantee you none of us has a clue about how they run their day to day operations and how their finances actually work. You can’t blame Quantum for moving slowly even though the direct consequence of it is that a few drivers are currently holding their breath over where they will be driving next year.

All that aside, I agree that Ijaz sounds dodgy as. ;) I instantly thought of the Arrows/Prince Malik saga when I read up about him.

[Anonymous]

Just seen the interview with Eric Boullier & Mansoor Ijaz, and I hope the deal goes through. I know that words are only words, and until the deal is done, it’s not a deal, but I’d be hopeful it happens. He seems genuinely excited by being part of the team. I just hope it’s not one of those “too good to be true” moments.

[Iestyn Davies]

Very strange one to call, this one – but he was just interviewed on Sky F1, along with Eric Boullier. So, if nothing comes of this, then everyone involved will look foolish. But, I’ll take Joe Saward’s position on this – it’s simply all about if the money turns up. He has experience detailing spying activities from the past as well as F1 (and where they intersected). What convinces me is that I was looking at an article on his old site grandprix.com, which was describing the events of Brazil 1994. He was adamant that someone would die soon, with the state the sport was in at that time (FIA rule changes making it more dangerous, in blind attempts to ‘improve the show’, and Brundle having a near escape) – and, lo and behold, one month later Senna and Ratzenberger were both killed, with Barrichello lucky not to be. He also reported how everyone thought Schumacher was already cheating (it mentions all the electronics) by race 1 of the season, indicated by the fastest pit stop with refuelling for a half race distance I’ve ever seen…

Looking at it from the driver perspectives, Maldonado’s antics this weekend suggest he has signed a contract he is happy with (reported in Venezuela to be Lotus – maybe some good news reported to distract from the economic troubles going on there at the moment?). Hulkenberg seems pensive and “will accept a car that can get him occasional podiums”, which could be Lotus but seems to be FI or Sauber. Maybe he is coming to terms with disappointing news and trying to find positives. Earlier in the year, he was usually upbeat on the future, knowing his skills were doing the talking and opening doors (negotiating a Ferrari contract would definitely give this feeling!).

Sutil was rumoured to have signed a one year contract extension at FI, but after this race was very down and “tired”, while Herbert seemed to suggest he felt resigned to giving up when he got back from his crash with Maldonado. His interview had a part where he described this race and season as ‘the past’, which could suggest he is mentally moving on already and looking at post-F1/his last race in Brazil. His demeanour reminded me of when I met him in Majorca in summer 2012 – one of being unsure at what will be coming next – ‘sullen hopefulness’ is how I would describe it. Di Resta by contrast is looking positively rosy and upbeat by his standards, not indicating someone who feels like they are being turfed out at the end of the year. Thoughts are he could replace his cousin in IndyCar, but I wouldn’t be surprised if he stayed at FI again now – they’ve both had bad luck, a lot of Paul’s driver induced, but Di Resta is ahead on points and that’s what counts at the end of the year. With Perez now available, Sutil is now 3rd on the drivers with money list (behind Maldonado and Perez), which could be critical if Di Resta is retained by FI.

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