Vijay Mallya : “We have shared everything in a very transparent manner”

Q: Can you explain why Force India has ‘broken ranks’ with FOTA and submitted an unconditional entry for the 2010 World Championship?
Force India supports FOTA, was involved in the formation of FOTA as a member, and actually submitted a conditional entry together with the other FOTA members on Friday 29 May. But Force India needs working capital to cover those months when there is neither sponsorship income nor income from FOM and so we have normal banking facilities.

As in the case of any other business, when you go to a bank and do an appraisal, they ask what are your sources of income? And as I said any Formula One team has only two sources of income – sponsorship, or FOM income – both of which are conditional on participating in the World Championship. If you don’t participate, then you don’t necessarily get these streams of income. As part of normal documentation we have certain loan covenants. And one of the loan covenants is that we shall enter. I tried to get them to waive this covenant. I subsequently checked with the lawyers, and they gave me an opinion. I shared this all very transparently with FOTA. At the end of the day, in support of FOTA, I can’t bust a banking covenant, and neither can I do anything that is illegal. And so on the Friday, well after submitting a conditional entry, I had to send an e-mail to the FIA saying, ‘Please treat Force India’s entry as unconditional.’ Subsequently I believe the FOTA executive has had a conference call, and decided that as in the case of Williams, that they were going to suspend Force India as well. Not entirely unanticipated or unexpected.

Q: After the race in Turkey you met John Howett, the vice chairman of FOTA. What did you say to him?
I explained to John, we are a little bit different to Williams, and we have shared everything in a very transparent manner with the executive committee of FOTA. Surely FOTA doesn’t expect to bust our covenant and do something illegal knowingly? And if the price to pay is suspension, so be it.

Q: Did the fact that Williams had entered unconditionally make it easier for you to do so?
No, I never even considered the Williams entry. I did what I did purely because we, as Force India, are legally obliged to do so. It wasn’t posturing, it wasn’t differing with FOTA. It wasn’t to do with anything other than strict compliance with our banking covenants and the duties of the directors of Force India to do what’s right for the company.

Q: Having been part of FOTA since the beginning, was it difficult to take a decision that you knew would not be popular?
I was hoping that having shared everything with them in such a transparent way that they would appreciate my position. Well, that was the gamble. I had no choice. If they accept the position – they didn’t earlier, but if they accept it in the future – then that’s good. If they don’t, frankly there’s nothing I can do about it.

Q: Did you have a constructive conversation with John in Istanbul?
It was very nice, very pleasant as always. I don’t know what John has said to the others, but he certainly told me that he would explain the circumstances to his fellow executive committee members, and get back to me.

Q: Will you lose out by being suspended by FOTA, bearing in mind that you are now in a secure position regarding the entry?
Frankly I don’t think we are going to lose out in any way. I guess ultimately all teams have to be treated equally either by FOM or the FIA, or indeed by FOTA. They can’t have any discrimination. Personally to me it would be very, very sad if ultimately FOTA and the FIA couldn’t work out an amicable solution. People are already talking about a new series. That to me would be very, very unfortunate. But if it happens, and that’s a very big if, we’ll have to sit back and decide.

Q: The entry list is due out on Friday. What do you think will happen this week?
I have heard that eight other teams have entered. I don’t know the details of these eight teams. I don’t know what is going to be the position of the current championship leaders, or others, so we’ll have to see. It’s not that easy or straightforward. I don’t think it’s fair to take anything for granted right now, because I don’t think anybody is interested in a breakaway series, changing the character of Formula One. I guess maybe both sides have a point, and they just need to hammer it out. But I’m in no position to comment, because having been suspended, I’m no longer invited to FOTA’s meetings or deliberations!

Q: As an enthusiast as well as team owner, how disappointed are you with the current situation?
The Formula One image, the Formula One brand, has definitely taken a beating. Nobody appreciates what’s going on. I just really hope that FOTA and the FIA can sort it out and move on.