Russian fertiliser group Uralkali, one of the two main bidders for Vijay Mallya’s Force India, the Formula One racing team that had gone into administration, claimed that a consortium of 13 Indian banks lost out on an estimated £40 million as a result of an “unfair” sales process concluded last month.

Uralkali said that by turning down its higher bid for Force India, the administrators had denied the extra funds that would have accrued to the shareholder of Force India — Mallya’s Orange India Holdings Sarl — which is subject to a freezing order issued by the UK’s High Court in favour of 13 creditor Indian banks led by State Bank of India.

Uralkali launched legal proceedings against administrators FRP Advisory in the High Court in London last week to claim “tens of millions of dollars” in damages over the alleged “prejudicial and unequal treatment” in the bidding process. The administrators, however, insist they oversaw a “fair and transparent bidding process” that led to the sale of Force India to the Racing Point consortium, which is led by Canadian billionaire Lawrence Stroll, after it went into administration in July. “We submitted by far the winning bid for the assets and business, which would have meant most money to the stakeholders and qualitatively recapitalised the team... We have serious concerns as to why the administrators did not use the opportunity to maximise the amounts that could have been paid to creditors and shareholders,” said Paul James Ostling, Senior Independent Director of Uralkali, who led the firm’s offer for Force India.

“Had he [the administrator] taken our bid, because of the freezing order, there would have been millions and millions more available for the ultimate stakeholders, which according to the freezing order are the Indian banks,” he said.

Mallya, through Orange India Holdings, set up in 2007, owned 42.5 per cent stake in the Silverstone-based racing team alongside a similar shareholding in the hands of the Sahara Group.

Describing Mallya — the 62-year-old UK-based businessman is fighting his extradition to India on fraud and money laundering charges amounting to nearly ₹9,000 crore — as a “unique character”, Ostling said it had been made clear to Uralkali that the administrator and team’s engine partner Mercedes would not accept any deal in which either Mallya or Sahara had any “share or interest or participation”.

“Mallya’s legal entanglements made it impossible for anyone to do a normal business deal with him to acquire Force India. When you are trying to do a deal with a man who is facing extradition and other charges, it made it extraordinarily difficult,” said Ostling, who indicated that Uralkali is still interested in acquiring Force India because it is a good racing team which “punches above its weight”.

Extradition trial

A ruling in Mallya’s extradition trial at Westminster Magistrates’ Court in London is scheduled for December 10.

The company said its ‘extremely generous’ offer to acquire Force India’s business, assets and goodwill, which included a cash consideration between £101.5 million and £122 million.

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