The FIA has just announced the official entry list for the 2010 Formula One Championship. As the ruling body has picked only 3 of the 15 applications for new F1 entries, they issued a Q&A press release in order to explain how they've proceeded to accepting the entries. So here it is:
How are you ensuring that applicants are adequately and securely funded?
We are using professional advisors to make checks on the substance behind any funding sources on top of obtaining reviews of pertinent contracts and other relevant documentation. Bank references have been supplied in many cases.
Where there are key sub-contractors required we have asked to see contracts and letters of intent. This extends to the sponsorship side, where plans and any descriptions of existing relationships )are required. In all these aspects we have requested evidence that substantiates any claim in the teams’ plans.
In the background to these evaluations, where key individuals were identified on the funding side, our forensic accountancy advisors have run reputational checks, alongside the checking of factual data supplied.
Once we had formed an opinion of the serious contenders we asked them to come to London to be questioned face to face by the due diligence team. Then a short summary report on the top five was sent to the FIA President.
What is involved in the Due Diligence process?
We have requested documentary evidence to support all the new teams’ assertions, in particular with regards to funding. Thus we have been provided with accounts, contracts, multi-year business plans and other supporting material. On the technical side we have asked for a thorough description of their capability, key staff, project plans, capital assets (present and planned for), organisational charts, and so on.Where there are key sub-contractors required we have asked to see contracts and letters of intent. This extends to the sponsorship side, where plans and any descriptions of existing relationships )are required. In all these aspects we have requested evidence that substantiates any claim in the teams’ plans.
In the background to these evaluations, where key individuals were identified on the funding side, our forensic accountancy advisors have run reputational checks, alongside the checking of factual data supplied.
Once we had formed an opinion of the serious contenders we asked them to come to London to be questioned face to face by the due diligence team. Then a short summary report on the top five was sent to the FIA President.