Ousting Dennis risks deals worth £160m, McLaren bosses warn

Ron Dennis's 35-year tenure as the boss of the McLaren automotive group crashed to a halt on Tuesday despite secret warnings from fellow executives that his ousting could jeopardise commercial deals worth more than £160m.

Sky News has learnt that a secret "risk register" compiled by senior McLaren executives highlighted the potential risk to future revenues at the Formula One (F1) team-owner amid a bitter row with the company's other investors

The document was referred to during a High Court hearing on Friday at which Mr Dennis failed to secure an injunction to prevent his fellow shareholders from placing him on gardening leave until his contract expires in January.

Mr Dennis's failure to gain the upper hand has triggered his exit as the company's chairman and chief executive, although he vowed to remain on the board "to protect the interests and value of McLaren and help shape its future".

In a statement, he criticised Mansour Ojjeh, his long-term business partner, and Mumtalakat, the Bahraini sovereign wealth fund, for "entirely spurious" reasons for forcing him out.

"I am disappointed that the representatives of TAG (Other OTC: TAGOF - news) [Mr Ojjeh] and Mumtalakat...have forced through this decision to place me on gardening leave, despite the strong warnings from the rest of the management team about the potential consequences of their actions on the business," Mr Dennis said.

"Ultimately it has become clear to me through this process that neither TAG nor Mumtalakat share my vision for McLaren and its true growth potential.

"But my first concern is to the business I have built and to its 3,500 employees."

Mr Dennis owns 25% of McLaren, as does Mr Ojjeh, while Mumtalakat owns the remaining 50%.

In a summing-up of Friday's hearing seen by Sky News, Sir Geoffrey Vos said the risk register similar to those used by the insurance broker Aon (NYSE: AON - news) had flagged concerns from other McLaren executives that deals worth "in excess of £160m in value" could be jeopardised by his ousting.

The other shareholders have proposed to install two of their own executives to "act in effect on a temporary basis as chief executive of the company," according to the document.

In his summing-up, Sir Geoffrey referred to a recent repayment by Mr Dennis of a sum of £570,000 for "overtime", the original award of which in 2013 had prompted a separate row over McLaren's accounts.

Nevertheless, Mr Dennis's fellow shareholders expressed support for his strategy as recently as 22 September.

Relations between the joint-owners have since deteriorated to such an extent that Mumtalakat last month appointed three further directors to the McLaren board in order to secure a majority for the resolution to oust Mr Dennis as chairman and chief executive, the court documents reveal.

The summing-up discloses that Sir Geoffrey decided against issuing the injunction being sought by Mr Dennis because it was "undesirable for the court to get involved in the internal management of companies".

The judge also said that he was "sceptical about the scale of damage that is alleged...when Mr Dennis will anyway only be there for a few more weeks".

The row over the leadership of one of the most venerable names in British motoring comes after a period of disappointing performances on the racing track for the McLaren F1 team, whose drivers include Jenson Button.

Mr Dennis's dispute with the other shareholders has cast a shadow over his 35-year career with McLaren, during which time he has transformed the company into a global technology leader.

Sky News revealed last week that a consortium of Chinese investors had tabled a £1.65bn takeover bid for McLaren - an offer that was presented to the company's board by Mr Dennis but rejected by his fellow investors.

The F1 team has won a string of drivers' and constructors' championships, although a recent collaboration with engine-maker Honda has failed to produce competitive results.

Although its F1 team's performance has been disappointing in recent years, its road-car business is expected to produce a record 4,000 vehicles next year.

Its Applied Technologies Group has also led to partnerships with companies such as GlaxoSmithKline (Other OTC: GLAXF - news) and KPMG.

News (Other OTC: NWSAL - news) of the Chinese bid - which sources suggested could attract Government scrutiny if it progressed further, given McLaren's world-class technology - comes seven weeks after Apple (NasdaqGS: AAPL - news) was reported to have made an approach to buy the Woking-based company.

Mr Dennis will remain on McLaren's board, despite his ousting, with the veteran McLaren boss saying he would launch a technology investment fund next year.

McLaren declined to comment.