Pain in the Haas: Rich Energy goes rogue
The strangest story of the 2019 season continues to twist and turn, with Rich Energy confirming, denying, then reconfirming the breakage of its title sponsor agreement with the Haas Formula One team.
During the heady day of off-track melodrama Rich Energy and its CEO, the enigmatic William Storey, were apparently pitched against each other in a battle for control of the fledgling energy drinks business, with the unsuspecting Haas team collateral in their online tit for tat.
WEDNESDAY EVENING, 10 JULY 2019
The saga began on Wednesday evening with a tweet from the Rich Energy Twitter account giving notice it had broken its title sponsorship contract with Haas on the grounds of poor performance, effective immediately.
Haas, whose fifth-place finish in the constructor standings last year motivated Rich Energy to conclude a sponsorship deal in the first place, has suffered a difficult first half of 2019, in particular struggling to understand Pirelli’s new thin-gauge tyres.
The team recorded an especially poor Austrian Grand Prix result, with Romain Grosjean and Kevin Magnussen finishing 16th and 19th, one and two laps down respectively.
“We aim to beat [Red Bull Racing],” read the Rich Energy tweet. “Being behind [Williams] in Austria is unacceptable.”
The inflammatory tweet continued, deriding the culture of Formula One as inconsistent with its brand values.
“The politics and PC attitude in F1 is also inhibiting our business,” it added.
Today @rich_energy terminated our contract with @HaasF1Team for poor performance. We aim to beat @redbullracing & being behind @WilliamsRacing in Austria is unacceptable. The politics and PC attitude in @F1 is also inhibiting our business. We wish the team well #F1 #richenergy pic.twitter.com/9mAt2dOnYu
— Rich Energy (@rich_energy) July 10, 2019
THURSDAY AFTERNOON, 11 JULY 2019
The unilateral cancellation caught Haas by surprise, and after reiterating in a statement his belief the sponsorship remained live, team principal Guenther Steiner told assembled media at Silverstone that he was limited in how much he could say about the situation.
“I would like to tell you more; I cannot,” he said. “They will be on the car this weekend, and then the rest we need to sort it out going forward.
“But the commercial agreement doesn’t let me talk about it, and I don’t want to. There’s no point to stir any more up. That’s what it is.
“There’s no point to go into a war of words about something. It doesn’t even upset me, it’s just something I need to deal with next week, and I will.”
“Rich Energy is currently the title partner of Haas F1 Team. I cannot comment further on the contractual relationship between our two parties due to commercial confidentiality.” – Guenther Steiner, Team Principal pic.twitter.com/egSltgGnAO
— Haas F1 Team (@HaasF1Team) July 11, 2019
THURSDAY EVENING, 11 JULY 2019
But the saga took a turn with the release of a statement from Rich Energy’s shareholders on Thursday afternoon that laid bare the internal division apparently rife inside the energy drinks company.
“Clearly the rogue actions of one individual have caused great embarrassment,” the statement read in an oblique reference to CEO William Storey. “We are in the process of legally removing the individual from all executive responsibilities.
“They may speak for themselves but their views are not those of the company.”
The shareholders also recommitted to Haas and the title sponsorship agreement.
“We wholeheartedly believe in the Haas F1 Team, its performance, and the organisation as a whole and we are fully committed to the current sponsorship agreement in place.
“The incident is very regrettable; we will not be making further comment on this commercially sensitive matter and will be concluding it behind closed doors.”
Not to be outdone, Storey tweeted his own bizarre statement via the Rich Energy Twitter account.
“The ludicrous statement by minority shareholders cosy with [Red Bull] and [Whyte Bikes] is risible,” he said. “Their attempted palace coup has failed.
“I control all of the assets of [Rich Energy] and have support of all key stakeholders.”
@rich_energy CEO @_williamstorey has commented "The ludicrous statement by minority shareholders cosy with @redbull & @WhyteBikes is risible. Their attempted palace coup has failed. I control all of the assets of @rich_energy & have support of all key stakeholders" #RichEnergy pic.twitter.com/1d32m1AELG
— Rich Energy (@rich_energy) July 11, 2019
FRIDAY AFTERNOON, 12 JULY 2019
By Friday lunchtime the lawyers had become involved, and the Rich Energy Twitter account leaked a letter from legal practice The Ebury Partnership apparently on behalf of the Haas team and directed to Neville Weston, one of the aggrieved shareholders who had previously attempted to wind back the sponsorship termination.
“We understand that you are seeking to take control of the company away from Mr Storey, the current CEO,” the letter read. “If that comes to pass, then our client will be happy to engage in without prejudice conversations with you but they will need to see clear and unambiguous evidence that Mr Storey has been removed as a director of the company and that a new CEO has been validly appointed in his place.”
However, Ebury doubted that Storey, who is listed as holding a majority of shares in both Rich Energy Limited and Rich Energy Racing Limited, could be removed from his post.
“Given the information available at Companies House on Rich Energy Limited, including its shareholder base, we are somewhat at a loss as to how you will be able to wrestle control of the company from Mr Storey.
Ebury also cast doubt on the company’s viability given the successful action brought against it by Whyte Bikes over a logo copyright dispute. Rich Energy was fined £35,416 and risks a winding-up petition from the cycling company should it not pay and cease using the logo after 18 July.
“Furthermore there is the outstanding claim for damages against the company for copyright infringement in relation to its logo so that our clients are rightly concerned about the solvency/ongoing viability of the company.”
— Rich Energy (@rich_energy) July 12, 2019
FRIDAY NIGHT, 12 JULY 2019
Whyte Magic entered the fray on Friday night, when it gave notice that a two-week deadline for Rich Energy to pay £35,416 legal costs had passed unmet.
The cycling company said it would pursue further legal recourse, including petitioning to have Rich Energy wound up and Storey declared bankrupt.
“The defendants have failed to pay any of the costs award. Each of the defendants is jointly liable for the whole amount of costs awarded,” read the Whyte Bikes statement. “[Whyte] will now be forced to take appropriate action to recover the costs that they have been awarded.
“This may include applications to the Court to wind up both Rich Energy and Staxoweb and to petition for the bankruptcy of Mr Storey.”
The saga will surely continue on Saturday.