Lotus F1 Team boss Gérard Lopez remains keen to buy Group Lotus, in order to develop an automotive brand of his own. His F1 team provides an estimated $30-40 million worth of advertising for the Lotus brand and that is currently going to waste as Lotus’s development is stalled following the takeover of Group Lotus’s parent company Proton by DRB-Hicom. The sponsorship agreement between Group Lotus and Lotus F1 Team has been cancelled with Proton agreeing to secure debts that the team has.
There has been much rumouring in recent days about Group Lotus and DRB-Hicom has now announced that it has not decided to sell the Norfolk-based sports car company and says that it does not know the source of speculation about the possible sale of the company to China’s Youngman. DRB-Hicom has also once again denied that it is going to put Group Lotus into administration. In its statement, DRB-Hicom said that it was still supporting Lotus Group “both financially and management-wise” and said that it has “identified one of Proton’s senior management personnel to take up a position in Lotus Group in an effort to strengthen its management”.
The source of the Youngman rumours appears to be documents that were filed at Companies House three days before the announcement that DRB-Hicom was buying Proton from the Malaysian government, when Group Lotus registered a new UK company called Lotus Youngman UK Automotive Company Ltd.
There were also filings with the Bursa Malaysia on April 12 which revealed that a company called Lotus Youngman Automotive Co Ltd has been set up in Malaysia.
Given the DRB-Hicom statement it is fairly clear that any attempt to offload Group Lotus’s debts using administration is not going to happen in the immediate future, which is good news for the staff and sub-contractors in Norfolk, where there were serious fears for the future of the company if it was going to be sold to a Chinese car company.
The “strengthening” of the Group Lotus management is also interesting. The current management remains in place, if only nominally. One of the problems is believed to be that CEO Dany Bahar’s contract, which runs until the the autumn of 2015, features a rumoured minimum annual salary in excess of £1.2 million, plus a range of other benefits, and a termination clause that would require payment in full of the contract. This means that while the Malaysians could get rid of Bahar that would require a very considerable sum of money in settlement.
It is probably worth noting that Group Lotus has been dragged into a legal action by a builder in Norfolk, who recently filed a joint claim against Bahar and Lotus for £92,485, for work done on the Lotus CEO’s residence. Documents filed with the High Court reveal that £375,000 was spent renovating the house, which is rented by Lotus. The documents claim that the work was paid for with a cheque from a Lotus Cars Ltd, but two invoices for extra work, which was directly ordered by Bahar, have been left unpaid, as it seems neither he nor Lotus will pay the bill. There is a counter claim that the work done was sub-standard, but there is little doubt that the whole business is rather embarrassing for the Malaysians, as it would probably have been cheaper and less trouble to buy a large mansion rather than spend such vast sums of money on one that is rented.
In the meantime Lotus has issued a press release with the headline: “Lotus Raises IndyCar Commitment” in which it has announced a reduction in the number of teams linked to Lotus from five to three. As a consequence of this decision, Lotus has made offers to Bryan Herta Autosport and Dreyer & Reinbold Racing to end its IndyCar agreements with them.
The statement follows on from a recent press release that abused various parties (including me), and which result in much hilarity at Group Lotus’s expense. There has yet to be any official apology for this strange outburst, which opened the way for a number of potential legal actions, but it has at least been removed from the company website.