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Uralkali sues administrators of Force India F1 team

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Russian potash producer Uralkali announced legal action against the administrators of the Force India Formula One team on Thursday after losing out in what it called a "flawed sale process".

The company said in a statement it had started proceedings in the London High Court and was seeking substantial damages for "prejudicial and unequal treatment". Joint administrators Geoff Rowley and Jason Baker, for FRP Advisory LLP, said, however, that they were unaware of any such action against them.

"No such claim has been received by us or, as far as we are aware, by the Court," they said. "We have fulfilled our statutory duties as administrators throughout this process and ultimately achieved a very successful outcome for all stakeholders.

"Any legal action brought against us will be defended vigorously, and we are confident it would be dismissed."

British-based Force India went into administration at the end of July before a rescue deal led by Canadian billionaire Lawrence Stroll, the father of 19-year-old Williams F1 driver Lance, was announced on August. 7. Uralkali co-owner Dmitry Mazepin is the father of 19-year-old Nikita, who is a development driver for Force India. The team are competing at this weekend's Russian Grand Prix.

The statement did not mention Mazepin but emphasised the business rationale behind Uralkali's bid.

"The Company sells its fertilizers to more than 60 countries worldwide, including 20 in which Formula One holds its Grand Prix Championship," it said.

"For several years, Uralkali, together with one of its subsidiaries, has been a partner of Force India and one of the sponsors of the Russian Formula One Grand Prix in Sochi," it added. "Force India would be a highly effective and valuable marketing tool for the business."

Uralkali said the winning bid was lower than the one it had submitted and described the responses from administrators as "inadequate".

The Russian company said its "extremely generous offer", that had included a cash consideration of between 101.5 and 122 million pounds, would have paid more than 40 million pounds to Force India's holding company, Orange India Holdings Sarl.

The team was previously co-owned by troubled Indian magnate Vijay Mallya, whose assets are subject to the terms of a freezing order in favour of 13 Indian banks, and the Sahara Group.

"We had a strong business case for acquiring Force India and we believe our bid was the best one tabled," said Paul Ostling, a senior independent director of Uralkali. "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."