A pretty robust exchange of views is currently going on between Group Lotus and Team Lotus (1Malaysia Racing Team) as they prepare to go head to head in the High Court in London. Group Lotus’s parent Proton issued a statement alleging that Team Lotus team principal Tony Fernandes asked too much money for a financial settlement to settle the question.
“Our proposed settlement sum was to settle only the purchase price, allegedly five million pounds for the ‘Team Lotus’ name, subject to due diligence and confirmation from 1MRT and other related parties, including Team Lotus Ventures and David Hunt,” Proton said in a statement. “Once the settlement was agreed to by both parties, the ‘Team Lotus’ name would unequivocally be vested with Group Lotus.”
Proton said from its perspective, this settlement was fair, as 1MRT could have continued using the “Lotus Racing” name and not incur additional charges. Proton said Group Lotus and it cannot be made liable for 1MRT’s commercial misadventure. Proton also argued that it is open for an out-of-court settlement but the proposal by Fernandes and 1MRT was unreasonable and unjustified.
“To all intents and purposes, 1MRT cannot now demand that we compensate them for a problem, which they got themselves into. 1MRT entered into a relationship with Team Lotus Ventures with full prior knowledge that Group Lotus was already in a long standing legal dispute with Team Lotus Ventures.”
Proton claims that the licensing agreement clearly stipulated that 1MRT could neither associate itself with Lotus nor use the “Lotus” name, once the agreement was terminated and said that the team could have easily remedied the breaches.
Team Lotus has responded by pointing out factual errors in the Proton argument (not for the first time) and says that these are “at best misleading and at worst straight lies” and is “designed to paint a very negative picture of the shareholders and founders of 1MRT and to cloud the truth ahead of the court case between 1MRT and Group Lotus, beginning in London on 21st March”.
This is strong stuff, but clearly Tony Fernandes and his partners feel that they are under unfair attack from Proton.
“Proton has now stated for the first time that 1MRT could have remedied the breaches in the licence agreement and continued to use the Lotus Racing name in 2011. None of this is true and is in direct contradiction to the reasons given at the time for termination of the Licence which said that the breaches alleged were not capable of remedy.
“Additionally, in a number of recent media articles it has become clear that the Renault F1 team were working on black and gold livery designs for their 2011 car in August 2010, well before the licence allowing 1MRT to use the Lotus Racing name was terminated. The only possible reason this livery was being planned was to promote Renault F1’s sponsorship with Lotus Cars, using a classic Team Lotus F1 livery to cement their brands’ relationship in the public arena. This begs the obvious question – If Proton were happy to allow 1MRT to continue to operate under the licence and use the Lotus name, why were their employees at Group Lotus working with Renault F1 arranging a sponsorship deal which was in direct contravention of the exclusive licence given to 1MRT and using a livery so obviously owned by Team Lotus Ventures and not Group Lotus. Unfortunately Proton’s assertion that 1MRT could have continued to use the Lotus Racing name in 2011 is made to avoid the obvious conclusion that Group Lotus was itself in fundamental breach of the 1MRT licence, as is proved by their own partners at Renault F1 telling the truth about when they started working with Group Lotus on their proposed sponsorship deal. Fundamentally Proton made it very clear that they no longer wanted to work with 1MRT and the facts of this will be borne out in the upcoming court case.
Team Lotus went on to say that: “Reference is also made to the sum of money offered to 1MRT for the Team Lotus name, suggesting that 1MRT shareholders were making unreasonable compensation demands of Proton. However, what Proton fails to mention is that the vast majority of the compensation sought by 1MRT was to cover the loss of FOM revenue awarded to the team for their efforts on track in 2010. 1MRT asked Proton to indemnify them against the potential loss of prize money from FOM which would have resulted from 1MRT having to change its chassis name. The compensation sums being discussed for 1MRT leaving aside the FOM revenue were not overly generous, which is specifically why Proton has not included that in their statement yesterday. With the FOM revenue included the sums are reasonable – without referring to it Proton are able to paint 1MRT as greedy which is why they are deliberately excluding that key point.”
The Team Lotus shareholders are equally upset.
“It is obviously disappointing to see Proton issue yet more downright lies ahead of the court case in London on 21st March,” said Kamarudin Meranun. “It would appear that they are becoming desperate because they are now contradicting themselves in the public arena, for example now saying they would have allowed us to continue using the Lotus Racing name and that the alleged breaches of the trade mark licence were capable of remedy, and are trying whatever they can to force us to bend to their will. We have invested a considerable amount of time and our own personal money in Team Lotus and we are seeing the fruits of that investment begin to blossom on and off track.
“When we first started our F1 program it was intended to be a Malaysian national project, one that truly reflected the government’s call for 1Malaysia. We wanted to use a combination of the skills and experience of the government, GLC and private enterprise to create something truly spectacular. This has not turned out to be the case as we are now carrying the hopes of the nation on our own. Proton’s involvement with us was intended to help them turnaround the company and give the brand a global platform without any major financial risk on their part. We now see that they have taken on a much greater risk by guaranteeing the loan Group Lotus needs to fund its plans and they have therefore left themselves open to far greater financial exposure.
“We have put out own money into Team Lotus and have taken on all the risk ourselves. Our counterparts at Proton are using Malaysian tax payers’ money to take a massive corporate gamble on the future of Group Lotus. Some basic financial facts bear this out – the interest servicing the proposed loan amount of more than RM 2billion, excluding capital repayment, is equivalent to the profit Proton made last year, just over RM 200 million. This means Proton is indirectly funding the entire plan themselves which is itself a hugely risky strategy. This is not just my personal view, it is also a view that has been shared in public by high profile members of the global financial markets who see the folly of these plans and are questioning the likelihood of its success.
“With their unlawful termination of our contract and their ongoing harassment of us in the public arena Proton is asking us to incur substantial losses and step away from our investment meekly and without a fight. I hope CEO Syed would do the same and be accountable for his actions in front of the nation if his overly ambitious plan for Group Lotus fails.
“My conscience on this matter is clear. In this web of fitnah I leave my fate in Allah’s hands because the truth will prevail. Inshallah we will overcome these challenges.”
Given the level of antipathy between those involved, it is clear that it is best to leave it to courts to decide…
No matter what happens, Lotus cars, Proton and Renault are not coming out of all this looking well.
The damage to all 3 of the above brands will last a long time , all due to their duplicity and constant change of position, which looks to many as blatant lies.
Good to see Team Lotus publicly stating their position. The case seems strong to me (the ill informed!!)
What is the desired outcome for Team Lotus here?
Also it’s good to see the Lawyers at Team Lotus picked up on the interview where Renault talked about having been working on the new livery since August. As I’m sure many others did I got in touch as soon as I heard the interview.
I hope a resolution is found soon which doesn’t result in the demise of a team (could Genii continue with Lotus backing? would Fernandes want to continue if his Lotus dream is shattered?)
When I first read Proton saying “1MRT wanted 60Million”, without further reading I thought that was quite reasonable, and about the sum most people had concluded it would cost them to change chassis name …. And then I read on and found Proton were claiming this to be an unreasonably number. On the whole that sounded really unreasonable and dishonest, as if a name is only a name and shouldn’t be a big deal.
I have to say, until now I missed the bit about Renault saying they had been working with Group Lotus since August last year, but that would seem to be not very conductive to the Proton/Group Lotus argument. Since Fernandes only mentioned going on as “Team Lotus” after the Proton license had been withdrawn, I think it might be rather hard for Proton to show good faith in stopping that license.
Even if Fernandes clearly spoke with Hunt before, that can be easily explained, I think, as trying to reasonably sort possible future legal issues for his Lotus Racing team.
David Hunt must be a very happy man. £5 million for the rights to the name – far more than he would have got if two parties were not interested.
One thing which hasn’t been picked up is that Proton state they have offered to buy teh Team Lotus name from 1MRT, althogh in thier first big statement they said 1MRT didn’t own the name and is one of the issues being contested in court. All a bit desperate by Proton.
Wow, does Bahar know what he wants?
– - –
(sees fuller bowl on another’s table)
“I want to be Lotus and go racing!”
(waaah!)
“I want to be the only Lotus, Tony can’t have any”
(dribble and drool)
“I want what i want, I just want it!”
(throws bowl from high chair, and mommy slaps him)
“But I only wanted to have the Nice Lotus”
(sobs)
– - –
..
Did this guy really not get the nice sweeties when he was little?
I didn’t. (only once, still stings!) Look at me, I became an ad man. (That’s one below estate agent in the corporate world)
..
More seriously,
– Bahar gives credo to the Team Lotus marque, by his tentative offer, though i don’t think he meant to.
– Whitewashing public opinion strikes me as a plan to smokescreen the value of any court decision.
– I am really not sure how much value all the mud slinging is, but TF has come out swinging as to his points, so there’s things to look for when it gets real on March 21.
..
“Proton claims that the licensing agreement clearly stipulated that 1MRT could neither associate itself with Lotus nor use the “Lotus” name, once the agreement was terminated and said that the team could have easily remedied the breaches.”
So it’s simple then, we find out what’s in a name. If the exact quote is “Lotus” and only “Lotus”, how does that affect “Team Lotus”, and why does some other deal mean a new *sponsor* can wade in and dilute the other’s brand?
There seem to be some implied admissions by Bahar’s lot here.
– j
nice
As perfectly illustrated by Malaysia’s PM and his cronies at other state own money laundering outfits, namely Poker Proton, ……money cannot buy class.
Excellent reporting Joe!
Hats off!
P.s. Can you do a piece on Mclaren and the Bahraini’s Royal?
D Hon
Yes this is exactly what I thought when I posted yesterday. That the sum asked by Tony was mainly to cover the loss of the FOM “points make prizes” money which would not be payable if the team name were changed.
I am a little surprised that Tony has not started libel and defamation proceedings Also that Bahar seems to be keeping his head down, no doubt somewhat chastened by the volume of antipathy against his tactics let alone his strategy. He may do well to remember that the UK is the home and centre of motor racing and that we do not appreciate his heavy handed methods. He will not win a court case by charging in shooting at anything that moves regardless.
The Renault team would otherwise have enjoyed a deal of support (as Renault) from British fans, as a good team with decent prospects, in particular we do support talent and were keen on seeing how Kubica ( now Nick) and Petrov did this year BUT that is lost now to an extent, we support the underdog in a fight.
The stupidity of Bahar is in not using “Proton” as the main sponsor, so far he has done them a disservice, they desperately need world wide image enhancement and awareness and are in dire straights with Malaysian protectionist levies due to come to an end, allowing real price competition, whilst leaving Tony to promote Lotus for him free of charge, in fact letting Tony continue, even later on in the season image doing the opposite of his intent now, claiming a link loosely with Lotus Cars could have given Danny boy a huge promotional saving. (and been more on the lines of Proton’s original intent)
As it is he is going to Bankrupt Group Lotus and allow Tony to come back and buy it for £1.00 plus debts. 3 years! I’ll send Tony the £1 myself.
“…1MRT entered into a relationship with Team Lotus Ventures with full prior knowledge that Group Lotus was already in a long standing legal dispute with Team Lotus Ventures.”
So what?
Proton is implicitly accusing the UK Intellectual Property Office of misfeasance for registering the trademarks for Team Lotus Ventures, and they are going to have to persuade the Judge on March 21 of the same.
Good luck.
It really seems to look like Group Lotus will lose this battle badly.
What if they do drag down Proton with them and Tony Fernandez buys Proton (and thus Group Lotus)?
Surely he’d find a way to terminate the deal with Renault, leaving them without cash.
proton sudah gila… mereka akan bankrupt lah lepas ni.
Fadhil Mohamad isa
I could not agree more…
My dislike for the Group Lotus outfit is growing by the minute. Does Renault not have any concern over how this might tarnish their image by being in any way aligned with Group?
£5million? Is that all David Hunt wanted for ‘Team Lotus’?
Silly, silly Group for not snapping it up years ago.
Mind you, I can still see why Group don’t want to pay Fernandes for what would appear to be his failed attempt to take over their company.
Ben G,
He has attempted nothing of the sort… yet.
Blimey! These guys really don’t like each other. I have to say, that Proton are really going to go to the wall with the way things are going and Lotus with it. Mr. Fernandes then steps in, buys Lotus and Proton for peanuts and we all have are faith in natural justice renewed. Maybe.
Now just a guess how long before GL reacts to Team Lotus statement.
I agree, let the court decide on this soon, or it will get even dangerous in the paddock (not just because Bernie looks set on going to Bahrain even with Tanks on standby for security reasons).
From what facts are in there, it seems GL really offered to pay something for the brand Team Lotus only (the GPB 6 million), acting as if the rest is not their worry.
Not hard to understand, why Team Lotus insists on at least a compensation of lost FOM funds when changing chassis name.
I hope the judge at least rules that this is all now sub-judice so that they both shut up about it…the public slanging match does neither of them any favours, all it serves to do is to turn fans and sponsors off both of them
I cannot understand why anyone as savvy as Tony Fernandes ever got involved in the mess that is Lotus. Does he really believe that using a famous name interests investors, followers of F1 or future car buyers? If so, I reckon he’s wrong.
Fernandes could have given his own name or business name to a team – as Jordan & Red Bull have done. He’s created an F1 team from scratch, with it’s own unique identity he could have gone on to build something that didn’t have ties to cars that have failed in the past.
This naming nonsense will hang around his team forever, it’ll cost £lots and for the most part we don’t care a jot whichever way it goes in court.
from almost every single piece of information I’ve heard it sounds like Group Lotus don’t have a leg to stand on. I didn’t know about the livery being prepared 18 months ago but surely that’s all it takes to prove that Group are totally in the wrong? I’m a little biased cos I really like Tony Fernadez and i think Danny Bahar seems like a bit of a dodgey character, but even so…
This is not going to end well is it?
How long before Group Lotus run out of credit/money?
As a long term Lotus customer/supporter the current situation just appals me, Danny has a lot to answer for.
Congratulations to Tony Fernandes and Team Lotus for speaking out and standing up for himself and his team.
Colin Chapman would be proud of his determination to maintain the team’s independence and determination to obtain success in it’s own right.
Good luck both off and on the track.
In F1 history it’s hard to think of a more uninteresting story than the current handbags over the Lotus name. It may be happening but it holds no joy or excitement or worth.
I hope that Team Lotus’ court case is as solid as all the information seems to suggest. It seems to me that every time someone from Group L opens their mouth information is being manipulated in a blatant manner, eroding any goodwill they might have had with the public at large…like when they said they did not want to capitalize on the old F1 team’s legacy as it should rest in peace, and almost with the same breath of air they introduce their new livery based on the old JPS Lotus.
I have always loved Group’s road cars and Renault have long been an interesting and compelling team to follow, but throughout this I can’t see any real F1 fan being sympathetic towards them.
All of this is very nice but at the end of the day, the court will decide based on the evidence and not the hot air coming out of these respective parties.
Scott Bloom,
I agree.
The more I read about this, the more convinced I am that Group will get screwed in court.
“It would appear that they [Group Lotus] are becoming desperate because they are now contradicting themselves in the public arena”
Says it all really. Anyone associated with Team Lotus should be proud that their owners are not willing to bullied out of what they’ve built by Proton/GL. I hope they continue to stand firm and come out on top when all this is sorted.
The one’s I feel sorry for are the Malaysian tax payers who are footing the bill for £400m+. Proton cannot really believe that an interest-only bill bigger than their annual profits is wise decision. The mind boggles.
A huge amount of fuss, all down to one man’s over-inflated ego. That would be a certain Mr Bahar who has shown just what kind of sportsman he is. God forbid that the travesty that is Genii Capital/Renault f1/Group Lotus/Proton (just who owns what here?) should win this case and a shame that the highly rated and respected Enstone team (the actual team) should be associated with the greedy Mr Bahar’s plans for self glorification. Good luck to the plucky Team Lotus who have been one of the most inspirational teams in F1 in modern history.
Loved the Team Lotus response. From what I’ve seen my support is totally behind Fernandes and his outfit, although of course the facts (and by extension, the courts) may prove otherwise. Still, they know how to work the media.
I can’t help but feel that by issuing another statement that 1Malaysia have then vehemently (and, I thought, rather convincingly) rebuked, Proton have rather shot themselves in the foot.
His is not the only ego in this. The other guy’s bought this on when he pandered to it with Lotus branding, seeking immediate recognition and fan support for his new team rather then simply getting on with racing.
Quote from Financial Director:
‘In this web of fitnah I leave my fate in Allah’s hands’
‘Fitnah’ ??? Oh, I learned a new word today.
My first thought, reading between the lines, was that Proton was intimating that it might settle out of court.
But I guess the reference to civil war means ‘fat chance’.
This is becoming my favourite F1 soap!
Jonno, if I remember correctly, Dani Bahar came to Group Lotus after the deal with Tony Fernandes was stuck. Just to throw my hat in the ring, I’m behind Tony and Team Lotus in this, both Tony and the team have conducted themselves throughout the 2010 season with honour, even throughout this heap of c..p thrown at them by Dani.
What I don’t understand is why group lotus allow ‘their’ car to have both Lotus, Renault AND Lada on it.
I get it. So Fitnah is the opposite of Dibnah?
as in Fred Dibnah, the most compelling, transfixing, gentle, quiet man i’ve ever seen on TV, may he RIP. It’s an equally religious thing, no offense intended. Just trying to say hots heads aren’t attractive.
ooh, that got me feeling soppy. Well anyway. . .
one of many many obits:
http://news.bbc.co.uk/1/hi/entertainment/3623347.stm
– j
this damn thing reminds me of spy vs spy of the MAD comics fame…
Well it looks like proton is running out of options and lies are begining to surface, it going to get nasty. I bet geneii investments wished they never touched it with a barge pole, the court case is going to damage them.You have to choose your partners wisely.If tony fernandes has to forgo the lotus name ( which i dont think he has to), as he has bought a contract from david hunt. what i dont understand is if proton’s intention was to invest at some point in f1, they had plenty of time preceeding tony fernandes to buy the team lotus rights. remember at the right price. Sorry i dont buy it and this was never on thier agenda. I think the real story here is that group lotus and proton the parent company were jealous of the fact that lotus racing, at the time scale they put together a team, managment structure, designed and built a car from the ground up and ready for the first grands prix was astonishing to say the least, the logistics was huge.That is what i call successful managment skills and it hurt proton because the could’nt do that.The response was spitefull, withdraw tony fernandes licence to the lotus brand and say their going to tarnish the lotus name ( the chapman family should be ashamed of them selves, and made them look silly by being sucked in by proton) tony went ahead , as he had no option to buy the team lotus rights as it was for sale. Its all about backing the right horse. sorry but i cant help thinking that proton is to small and not laturally and forward thinking as tony fernandes is, you’ve got to be quick in this game and proton are not.If tony does have to forgo the name i hope this will encourage the team on under a very difficult time them, because they have been remarkable.I am a fan and what ever you call your selves e.g air asia racing i am behind you 110% and tony keep racing its the only way, its in you now mate……..
Oh i forgot to mention the time scale at the begining was 5 months to build the team….
Apologies, but hasn’t 1MRT already changed chassis name from 2010′s Lotus F1 Racing to 2011′s Team Lotus? And if with the retention of accrued Concorde rights, then why not a further change? Am also interested if anyone has a headsup on the appearance fees (often called historical payments). I have the schedule but not the appropriate pages of Concorde. Do the rights to such payments lapse? Can either side lay claim to bringing ACBC’s Lotus back to the party, and is GL willingly to relinquish the benefits of remaining Renault? Time for a serious overhaul me thinks, or maybe a flutter on the Arrows name.
franklyn,
No, the chassis is still a Lotus.
Group Lotus find themselves in a deep hole and every day Dani Bahar keeps digging deeper with every public statement coming from GL. Proton shareholders should open their eyes and see the disaster unfolding around them since they brought Bahar on board. Maybe Renault boss Carlos Ghosn will have a word with his legal department so they can extricate themselves from having the Renault name vilified through its association with Bahar’s mess.
I hope GL loose their case against Team Lotus, are ordered to pay hefty bank-breaking damages plus legal costs and hasten their path to the bankruptcy administrators. I am sure Fernandes has the resolve to stick this out and buy out an imploding Group Lotus. The longer this drags on the more goodwill Proton haemorrhages.
no one will win …
proton is gambling with tax payers money.
is it possible for tony fernandez sue Proton?
Fadhil,
I suspect he can
Franklyn, i understand what your saying but they still retained the word lotus under 1mrt ownership, nothing changes really. I do think 1mrt and tony fernandes could sue proton after all the dust has settled, but i rather think that they wont, as they will be heavily and finantially damaged including protons image, ironically no ones mentioned eccles waiting in the wing to plunge in the knife with the fia for bringing the sport in disrepute, as it is technically the fia who allowed two teams to have word lotus on their cars and team. This has turned out to be one very messy ordeal, as no compromise can be found i hope the judge can use is wise, skillfull knowlage and understand what has unfolded here, fernandes owns and holds the contract to the team lotus name and possibly marketing rights and group lotus and parent company proton owns the group lotus name and the car marketing for the road not racing, there is no mention on the group lotus road cars about racing, remember colin chapman had two very different companies.Which came first the chicken or the egg, in the name lotus, it was the team lotus who came first and the group lotus was second to fund the racing program, which came years before he started building road going cars. Im suprised by clive chapman, appearing at the first grands prix next to the cars on the start line in 2010 saying what a wounderful job they have done. Sadley the chapman family dont really know who owns what and they are out of the ballpark.Remember its not about group lotus it is the name team lotus what it is all about, fenandes owns it with 1mrt and proton dont. be free to make a comment on this article as it woul be interesting on someone else view…
i can assure u guys…the sponsorship that proton made to renault will not last for next year….they gt financial problem for GL to launch their new car which force them to switch money from malaysia banker as big sum of loan!! If tony can persist for 1 yr….2012 season might only have 1 lotus left XD
[...] Lotus versus Lotus – more slugging A pretty robust exchange of views is currently going on between Group Lotus and Team Lotus (1Malaysia Racing Team) as [...] [...]
[...] Source: http://joesaward.wordpress.com/2011/02/18/lotus-versus-lotus-more-slugging/ [...]
Now that Bahrain GP is cancelled, does that mean there is a possibility only one team with Lotus name on the grid in the first race in Melbourne?
I know it’s a bit late on this thread, but I this came across my path this morning.
http://autos.yahoo.com/articles/autos_content_landing_pages/1727/the-future-is-back/