Formula 1’s Most Mysterious M&A: More Clues On Williams’ New Owner

On Saturday 15^th of September, representatives of Williams Racing’s new owner, Dorilton Capital LLC, attended the Tuscan Grand Prix in Mugello, Italy. Deputy Team Principal of the Williams Formula One racing team, Claire Williams, has now departed the team—making this the firm time in 43 years that the Formula 1 team founded by Frank Williams is outside family management. Yet despite the presence of Dorilton’s chairman Matthew Savage, the group’s general counsel Stephanie Dattilo and the CEO of Eden Rock, James Matthews—himself a former racing driver—we still remain unclear on who Williams’ new owner really is.

In my last article for Forbes, I flagged new leads in the search for Dorilton’s new owner. After discovering a maze of offshore companies in my last article for Forbes, an interesting trend emerged. Dorilton’s acquisition of the British team has been one of the most silent M&As in many years. Who owns Williams, and why is anonymous ownership of Formula 1’s most storied team so sacrosanct to the parties concerned?

The Williams Dorilton M&A: What We Know

As I reported for Forbes on September 6^th, several high net worth individuals had been previously linked to the acquisition by the Italian publication La Gazzetta dello Sport—whom Mario Salvini reported to include Williams driver Nicholas Latifi’s father, Michael—a Canadian-Iranian businessman, who already owns 10% of the equity in McLaren Group. Russian businessman Dmitry Mazepin and Israeli businessman Chanoch Nissany were also referenced by La Gazzetta—with both men’s sons, Nikita and Roy, already racing in Formula 2.

In my September 6^th article, I highlighted connections between businessman Calvin F. Lo, who had not been previously been linked to the $180 million U.S Dollar acquisition. Upon receiving Glomar response from Mr. Lo’s attorney on whether Lo was behind Dorilton, further questions arose for Lo. Due to disappearing news articles on Lo’s business activities, and delays caused by times allowed for right of response by Lo’s attorney, various publically available documents that demonstrated possible links to Dorilton could not be reported.

Lo has still not provided any public response to the article. His attorney will neither confirm nor deny the businessman’s involvement in Formula 1’s most mysterious M&A (for right of response, portions of this article were sent to Mr. Lo’s attorney in order to allow for right of comment).

Copper, Cobalt and Rare Earth’s Role in Formula 1

During my correspondence with Mr. Lo’s representative, Edward Watts, I noticed that Mr. Watts responded (on one occasion) via an email address linked to an entity different from Lo’s company, R.E. Lee International.

The entity—known as R.E. Lee Octagon—was traceable to the Cayman Islands. Documents provided to me by a third party on condition of anonymity, implied R.E. Lee Octagon’s ownership, or significant control, over several entities. While many are involved in processes necessary to automotive engineering, including research and development, the most notable is Octagon Commodities—an entity with substantial interests in the extraction of rare earths. On directly inquiring whether the documents provided were proof of Calvin Lo’s ownership of Octagon, Mr. Watts confirmed, by written response, that:

“Further to your provision of [these] materials, we can confirm that R.E. Lee Octagon is a fund which operates from Grand Cayman, with the purpose of managing Calvin Lo’s personal investments.”

The Reason Rare Earths Power Formula 1: To Cayman…and Octagon

FIA President Jean Todt shocked many industry insiders when he announced on April 1^st 2019 that the Formula One World Championship would switch, entirely, to all-electric engines by 2021. The industry considered this statement notable.    

As I previously reported, one of Mr. Lo’s close friends is the actress Michelle Yeow—who is best known in the United States for her role in Crazy Rich Asians. Yeow’s partner is Jean Todt.

The extraction of rare earth metals is not just critical to achieving the FIA’s goal, but to broader environmental plans for car manufacture. Octagon Commodities possesses several significant contracts with China Nonferrous Mining. One, which is publically available, is for annual capped purchase of copper—up to the value of $36.4 million U.S Dollars. R.E. Lee Octagon also holds other commercial ties to China Non Ferrous for purchase of many rare earths used in the manufacture of electric cars.

My statements here must not be read to infer any form of impropriety between Lo and the former FIA President—this move toward sustainability in automotive engineering has been the subject of significant discussion for many years, and between many different individuals, as high carbon emissions have been long considered inappropriate by those within F1 and beyond. Tesla has devoted significant discussion already to sourcing the cobalt necessary to meet their production plans.

Yet as Lo enjoys close friendships with senior figures in Formula 1, it is difficult to understand the level of secrecy Lo and his representatives have met my enquiries with. The deal, however, is unusual in motorsport, where owners tend to be vocal characters with public facing roles in the sport. Could the new Concorde Agreement and potential exposure to liability caused by payment disputes be the reason Formula 1 teams and companies go offshore? Is Dorilton an example of a new trend where motorsport chooses opaque jurisdictions and takes the business offshore?

Formula 1: From Celebrity Ownership to Opacity Offshore…

As attorney Juris Gulbis told me by phone during the course of my review of corporate filings on Octagon, mapping ownership of sports assets across multiple jurisdictions has become “a way for both entities and high-net worth individuals to navigate a regulatory landscape in Formula 1 pegged to changing considerations.”

Gulbis is referring to the new legal guidelines issued by the FIA which were intended

to avoid further patent disputes between teams following the infamous case of the pink Mercedes. “Appendix 6 of the 2020 F1 Sporting Regulations clearly specifies ‘listed parts’ to avoid these concerns in future. Offshore, or anonymous ownership may become a trend amongst teams who wish to mitigate risk by choosing jurisdictions with more favourable terms for challenges specific to Formula 1 team ownership” Gulbis told me, but added “In Dorilton’s case, and in R.E. Lee’s, “anonymity of ownership appears to be the prevailing concern. A significant number of jurisdictions, trusts and partnerships are used—not for tax efficiency or asset protection, but to hide the ultimate beneficial owner as robustly as possible.”

When I contacted Mr. Watts again for comment, he stated (jointly, and in his capacity as Mr. Lo’s attorney, that:

“R.E. Lee Octagon’s relationship with various mining companies is well documented, as is my client’s interests in the sports entertainment sector and the automotive industry”.

Lo’s counsel’s acknowledgement of interests in rare earth extraction are—to some extent—public demesne. However, in past exchanges for my last Forbes article on Dorilton, neither Mr. Lo nor R.E. International had acknowledged any stake in the sports entertainment sector. Upon investigating this angle, a relatively large number of entities emerged with links to Lo, and the myriad subsidiaries his company comprises. Due to closed company registers and the ongoing disappear of articles referencing Mr. Lo’s business activities what follows must not be read to prove Lo’s ownership of Dorilton, or any other entity—rather personal friendship and commercial relationships with parties who have significant assets in Formula 1, and to whom Mr. Lo’s counsel with “neither confirm or deny knowledge or links in any form, whether to REL Group or to Calvin Francis Lo”.

While the right to neither confirm nor deny knowledge is often a standard corporate response, and should not be read to imply anything besides “neither confirming nor denying” I suggested in an exchange with Mr. Lo’s attorney by message that refusing knowledge could be read by some to imply involvement with Dorilton. These entities all have common ties to REL Group, and form a maze of entities in 7 jurisdictions—from Nevada and Wyoming, to the United Kingdom, via Cayman, the BVI and Delaware. Mr. Lo’s attorney’s reverted to my email asking about Mr. Lo’s involvement with “I reiterate the response already given”. To avoid litigation I supplied R.E. Lee International with quotes used prior to the publication of this article.

A Tale of Many Octagons…

Mr. Lo’s business activities are extremely hard to discern—with limited resources simply confirming his company’s management of $8 billion U.S Dollars, and his ownership of the Mandarin Oriental Hotel in Taipei. The demand for privacy has slowed this article’s completion, and has also necessitated a cautious approach to publication for my own legal liability—but the links to motorsport (besides rare earths and research and development of automobiles) which I flagged with Lo’s counsel for comment are as follows.

Corporate filings for The Jane Goodall Institute, in which Mr. Lo has been involved for several decades show various connections (at least in the corporate sense) which Lo enjoys to a plethora of philanthropists, sports personalities—and many others who enjoy fast cars.

Octagon, for instance, is a California entity with various branches, in various U.S states—and is actively involved in motor sport. A further two Nevada entities (including a service jet broker and a commodities extraction company with concession ownership in Chile for rare earths), are also linked. While Octagon is a reasonably common name for shelf companies, built for purpose by formation agents, the UK non-resident entity Engels No. 1 Limited is registered as having previously been named Octagon Motor Sports—until its name changed rather suddenly.

This is where Mr. Lo shares a tie to the famous primate conservationist, after which the initiative was named. Notably, the auditor responsible for signing off on past accounts for the The Jane Goodall Institute (previously JGI International) is Mr Oluwafikayomi Tomori whose declared profession to UK authorities is “professional sportsman”. Mr. Tomori has close links to Brands Hatch Circuits Limited, a UK non-resident corporation which was previously named Octagon too—while Brands Hatch itself is linked to various M&A deals in motor sport, and the acquisition of non-tangible assets in Formula 1. Tomori, therefore, according to publically available information, has dual cross-over with both Engels No. 1 (Octagon UK, until recently) and that company’s predecessors (Brands Hatch, Octagon and Silversmith).

Please note, Mr. Lo’s counsel will not confirm or deny any ownership of Dorilton, or, for that matter, any entity named here, besides R.E. Lee Octagon (in addition to REL’s named companies).