A little more on the Group Lotus situation

The complicated situation regarding Group Lotus and Lotus F1 Team is beginning to become a little more clear. British Prime Minister David Cameron was in Malaysia on Thursday and spoke of improving trade relations between the two countries.

“Britain is back to do business with Malaysia, back to build our partnership on vital global issues,” said Cameron in a joint press conference with Malaysian Prime Minister Datuk Seri Najib Abdul Razak. The pair intend for Malaysia and Britain to have £8 billion in bilateral trade by 2016. The level is currently less than half of that.

It is understood that the future of Group Lotus was discussed during the meeting. Cameron is keen to save the jobs of the hundreds of people employed at Hethel and the many subcontractors in the region that rely on the company. The firm is deemed to be of vital for the economy of Norfolk, which is why it was given a £10.4 million grant at the end of last year by the Regional Growth Fund, the aim being to create jobs in the area. It would be embarrassing for the government if that money has gone to waste.

The problem is that the ongoing takeover of Group Lotus owner Proton (owned by the Malaysian government) by private firm DRB-Hicom has led to a number of changes in the relationship between the car business and Group Lotus. That in turn has impacted on the relationships of both entities with the F1 team that (currently) bears the Lotus name. There has been intense speculation in Malaysia in recent days over whether or not Proton MD Syed Zainal has resigned. Group Lotus issued an extraordinary press statement a few days ago entitled “Never let the facts get in the way of a good story”. This said that the rumours were not true and that similar stories about Group Lotus MD Dany Bahar were also incorrect. This was not telling the whole truth.

Well-placed sources say that Syed was asked to resign and tendered his resignation two weeks ago, although he is continuing to act as Proton CEO, pending the appointment of a replacement. In the last few days he has been in China trying to work out a deal to sell Lotus to one of the three Chinese companies that have expressed an interest. None of them, however, is willing to take on the Group Lotus debts. If one of these deals is agreed there is unlikely to be any protection for Group Lotus at Hethel. Bahar’s situation is rather similar to that of Syed. Sources say that he is no longer a Group Lotus signatory and no longer has any executive power, although he remains nominally in charge. It is believed that he is now keen to get a job with one of the Chinese companies, if they become the new owners of Lotus.

The statement included personal attacks on various people, including me.

I am also told that Proton has not made any loans to the Lotus F1 Team, as has been reported. What actually happened is that the company agreed, as part of the settlement over Group Lotus’s abortive sponsorship of Lotus F1 Team, to take over the debt that the team had with Snoras Bank, which was itself rolled over from an old debt to Renault. The loan is not secured by any of the team’s critical assets, such as the race cars or the F1 entry. The factory buildings are security for that loan, but the team could move elsewhere fairly easily and all that would be left for Proton would be an empty building and a wind tunnel. That is unlikely to happen and the politicians are working to sort out the problems. Group Lotus has sizeable debts with a consortium of Asian banks, many of them with close links to the government and with DRB Hicom. The obvious solution would be find a way to lose the debts and then allow Gérard Lopez of Lotus F1 Team to take over Group Lotus, thus securing the jobs of the staff at Hethel, reuniting the F1 team with the car company, and putting Lotus in a position from which it could prosper and support the government policy of building up British engineering, rather than seeing the Lotus legend sold to the Chinese. An agreement between the two PMs could save embarrassment all round.

76 thoughts on “A little more on the Group Lotus situation

      1. Joe,

        The Group Lotus statement had the hint of someone spraying bullets hoping to tag anybody they could. It was symptomatic of a company in trouble.

        Now your reportings on the situation have been nothing other than balanced in my view. To me its good old fashioned investigative journalism, present the info that you’ve gleaned and then give your take on it. Group Lotus were obviously shaken as your findings where too close (if actually?) the truth.

        To the future of Group Lotus. If the Chinese companies aren’t willing to take on the debt and with the best option of keeping GL in Norfolk being GenII, will a deal be negotiated with them whereby they take on GL after a pre-packaged administration? This seems to be a preferred route for a number of companies in financial trouble.

        Keep up the good work.

        1. I think FrancescoPiccoli was just poking fun at the whole situation. I could be wrong but my first reaction was to laugh.

  1. As always a lot of detail and insight from Joe – once again throwing into stark contrast the lack of information and stories on the BBC’s F1 page…there’s hardly anything there!

  2. Very interesting and balanced piece. The key issue appears to be the lotus debt. Whether a small subsidiary of a larger business should have embarked on a growth plan that involved taking on so much debt is the ultimate question

  3. Can’t wait to see the response of Group Lotus to this. Challenging Joe to a fight after school? Sticking out its lip and not talking to anyone for ages and ages until they all say sorry? Running home to mummy and crying?

  4. Joe,

    Why would anyone want to take over Lotus? The name is worth little, as most of us who have had Lotus cars, know it means Lots Of Trouble Usually Serious. The cars are still being appallingly built. I drove a new supercharged Elise from St Tropez to the Nurburgring a couple of years ago. The build quality would have been unacceptable on a £3000 Yugo let along a £38,000 car, the same price as a Boxster. Good grief I would rather have a Caterham ;-}}

    The existing range of cars, other than the Evora are very long in the tooth. Danny boy’s vanity projects are unlikely ever to lead to a vehicle, which sells in any quantity or at a profit. The racing engine business is in trouble with deliveries of the Indy engines behind schedule. There are all sorts of absurd sponsorship commitments.

    The only thing that is worth real money is Lotus’ engineering consultancy business. The whole thing would be a horrible money pit.


    1. The fact the cars are appallingly built actually means there’s a lot that can be improved Wilson!

      I think Lopez would see the opportunities. The brand is solid enough to rally a nice business network around. He can still work with the chinese using the considerable skill in the Lotus engineering branch and if he gets back to the cars that are working and manages to get his connections in Russia and Asia working its easy to stay stable.

      And maybe one or two of the models that were announced are actually close to market and can be built (at least partly) in Hethel.

    2. I think the name is worth something as it is widely recognised as a sports and racing car brand even by those with little interest in sports or racing cars. However that value is very probably much less than the value of the debt. If a deal could be made to take over the business and have the debt written off or maintained by someone else AND (important part this) have support from a ‘proper’ (i.e. not Chinese) car manufacturer (e.g. Toyota, Honda, VW, even Fiat) to give some know-how in terms of build quality and assist with the hardware then there is potential for a viable business. Dany Bhoy’s plans are not viable, and I don’t even think Fernandes or Genii would be able to turn it around now.

      1. In my opinion, if somebody wants Lotus, the sensible thing to do is to first let them go bankrupt then buy whatever assests you want from it (i.e. the name, the Hethel factory) from whoever is handling the administration of Lotus. Buying Lotus outright as it is now, with its large amount of debt, sponsorship contracts and essentially no new properly sellable cars? No.

  5. Interesting.

    I knew it wouldnt take long for you to explain the strange (to put it mildly) “load” situation.

  6. What is the government doing spending public money on this company?

    The Regional Growth Fund grant, I mean.

    I don’t care if that money is ring-fenced or only extra deductions and not cash, there should have been one glance at the sponsorship commitments DB made (whether commuted to loans or not), the general absence of common sense in any commitments, and any application declined.

    Honestly doubt I can be bothered, but someone should put in a FOI request for the basis of that decision and any audit conducted.

    With my apologies to the GL employees, no way should government money ever subsidise private enterprise. I know it’s easy to point the finger at just about anything from Virgin Trains to, well pick your own, so called Labour invited everyone to the trough. I think there are rare exceptions to the rule, very rare ones, and they have to be strategic national importance, or a policy change that all in a line of business get automatically. If we got government out of business, or simply undid the past 17 years of corrupt favouritism, we’d be a good way along to unburdening the public purse and encouraging actual enterprise.

    This makes me angry. Not GL, nor any little business like that, should ever be discussed at even ministerial level. Let alone by the PM in high level foreign talks. I wish some other small manufacturer of cars would stoop to making a competition complaint before the EC, but I doubt any care to go that low or risk it be thought they feel threatened. But Caterham might yet and should complain . . I’d just be surprised.

    That Cameron should even be rumoured to have discussed GL, is a insult to his office, this country, and a loss of face I’d never permit because it will be seen as kowtowing by the Malaysians. With not a gripe against the Malaysian people, I have good friends out there, the whole dealings surrounding the Lotus Triangle have been underhand and disgusting.

    I believe the entire affair to be deliberate machination, right down to to the running down of GL finances and the purposeless and futile court case over the trademark (it was clear as day to this and other amateurs here that despite we liked TF, the case could not succeed.) and the Punch and Judy show that dear Mr Bahar has been running single-handed. (playing both roles, based on the last press release!)

    Obviously the F1 team is the truly desirable target in all of this.

    You may well imagine our idiot government may be shaken down for even more money to write off GL debts. I can see the M’sian govt offering to force Proton’s hand to accommodate GL financially, or release the race team loan, or any number of things* if say the British govt does something “equally as nice”. Only of course our govt didn’t manipulate GL or the race team into these debts.

    (* dangling bilateral trade advantages in a country with high import taxes and yet so little trade with the UK is hardly much of a carrot. Seriously, 8BLN target by 2016? Normal people including myself are slow to deal with number shock, so it has to be reminded that is below even insignificant levels. Also no mention which way: us selling them, or them selling us? So no skin off their noses even though a trade deal “success” may be announced.)

    Proton itself is desperate to survive. It needs technology, finance, and it needs decent management. Rolling this up gives them almost all three.

    Who ultimately controls Proton, and that is Mahatir, behind the scenes, will do anything to keep it alive, and Proton would have a much better chance in life called Lotus, with all these pieces fit together, if a stupid bunch of tory wets bail out of the finances, debts largely incurred in this charade to get not only Lotus Cars but a Lotus F1 team (and maybe some neat Caterham engineering also) under one roof. I believe they are determined to gain a clean sweep. TF is not in orbit very distant from Mr Mahatir . .

    When TF comes into play again, I can’t tell. Maybe his trademark pitch was his only one, Catherham his solo escape. However there was a lot unanswered as to how he thought buying a license one minute transmuted into talking with the remnant’s of Chapman’s estate the next and assuming he could succeed. That was heard closed session, but would have been fascinating. I kept asking myself why, why, why. . .

    I put it down to naivety at the time, but that was because I wasn’t seeing the whole picture and out of all the contenders fancied him by far. Back the nice guy. Not thinking this was deliberate good cop, bad cop play. No, not naivety. Not necessarily poor legal advice.

    It could be TF is clean out of it with Caterham, but I don’t see him settling for little prizes, there’s still too many parts in motion, and political connections, and obligations even of the most polite kind to folk such as to Mahatir don’t evaporate over night.

    GL is actually going to need some level headed management. I do imagine TF could clean up the mess caused in cobbling together this new mini empire under Proton’s wing, and might well be tempted if the absolute top job were his. Lopez, with a increased stake in it all, might likely be very happy with the CEO’s seat. Where is the illogic in putting the two smartest guys on the same job that they’d both like to do?

    Or just look at it this way, TF had his first shot, but failed. So next the M’sians pick up the strings to Danny boy, and start running GL into the ground, but not before some very funny shenanigans to get a financial link into the F1 team. As pointed out by Joe, it’s a loan, but it’s not exactly claws, yet it is another thing to table when they push for govvy support, that they are in part financing Enstone, another angle to dangle, and a important bit of our engineering landscape.

    I still think the overall purpose of the sponsorship strategy was in fact to get a financial connexion in there that could be played with later. After all, it was too expensive a bluff of itself. It merely had the bonus effect of getting a team named Lotus beholden to Hethel – by – Kualur Lumpur.

    I’m showing my age, I was up for 3rd practise, but nodded off, at my desk no less, for quali. Blast it, arrrgh! Maybe my strategy – think is rusty too. But to my eyes the only neat solution is to roll all this up AND mop up TF’s side, because frankly he’s the missing link, someone sufficiently heavyweight to hold it all together in Malaysia. Meanwhile, such a fun show to watch, just get it over before it detracts any more from F1. I cannot entirely dispel my distaste at how F1 has become a sideshow hunting ground for national interests, and it is not helping when F1 needs all the clear image presentation it can get.

      1. Thanks, Forza, yes, I forget there’s usually a draw down period with grants. Makes most of them useless for nimble small companies, too much admin, and explains why those who get them are almost always in limbo, turning into real corporates way before they are big enough to sustain that drag factor. Nonetheless, it’s blag that keeps droll bank managers at bay temporarily and meanwhile I simply hate the idea of being in business but having to beg by filling forms that “sorry, sir, we can’t actually do business unless you help us, pretty please”. There was a ruse once where failed contract publishers in London bought a cheap home in North Wales, picked up loan guarantees and were back inside two years. It was a regular run for some. In comparison the new SEIS scheme looks so sane I might just use it.

        Weird upshot of having Sky, just seen on the guides there was a National Geographic “Megafactories” episode on Williams. Looks like brochure promotion, but still, clips I perused look nice and detailed in a voyeuristic way, if you like engineering tech. If they can do that for a pay channel, surely they can insist it’s on normal telly, where the future workforce here can have a look see if they like?

    1. The simple reason government money is spend on grants etc is because if we don’t then someone else will. And if we don’t and someone else does then the jobs go abroad and the government has a higher social security burden to fund with fewer taxpayers. (Not to mention dissatisfied voters)

      Granted in the case of Lotus is seems a bit foolhardy as the plans didn’t look sensible but sometimes you just have to take the risk and hope they can pull something off. If the money hadn’t been paid and the factory closed and production moved overseas, how daft would the government have looked if they had turned things around?

      I can’t claim to know how he thinks but I get the impression that Tony Fernandez has turned away from Lotus completely and is now putting all his efforts in to making Caterham a much larger brand. I’m sure if the name was available for a bargain price he’d take it on but there is too much confusion and too much to put right for Lotus to be worth his while anymore. Also, we’ve seen that he is keen to build an F1 team up from nothing so the similar challenge with Caterham might be more to his liking. There is no ‘baggage’ there so he can just get on with forging ahead rather than having to untangle a mess.

    2. “I cannot entirely dispel my distaste at how F1 has become a sideshow hunting ground for national interests”.

      It must be said that this is hardly the first time this has happened. The cars used to run in national colours, after all.

  7. Nice piece Joe. I think you are exactly correct and I have good reason to say that. The term ‘Executive powers’ or rather removal of them, is, I hear, a perfect assessment of the situation. Some of the points you make as speculation are I think, very close to being facts.

    I’ve seen at first hand the tricky cultural and business protocols involved with the Malaysians at Lotus, from top management right up to the Royal Family. Not a criticism of their culture, in fact it’s a compliment.

    There will be some substantial emphasis on no one losing face here, even if they lose their jobs. I don’t think anyone of note will be ‘fired’ at Lotus but we could see resignations to spend ‘more time with the family, and I’d assume ‘to pursue new ventures’ will be up there too. Wait for the phrases ‘will continue to advise” and ‘…continuing role as Ambassador for Group Lotus’ to occur as well.

    If we are to believe what you have said here, and I have no reason to disbelieve it, then the Group Lotus Rant Release looks like, at very best, a total PR disaster for which there will need to be clarification, correction or withdrawal (bit late for that). At worst, and I’m no lawyer, I think some of the statements in there relating to both you and Lotus F1 may well be actionable in light of the forthcoming facts, if the offended party is particularly litigeous.

    Now of course, if Group Lotus are right, and you’re wrong, then they should be relaxing a statement telling the world that, right about now…. so, Group Lotus PR… what about it?

  8. We published an update on Friday, based on information received last Wednesday from a source on the ground.


    I also spoke with Lotus on Thursday to confirm their understanding of the situation and discuss their options.

    The sense I gained is that their unorthodox press release ‘really’ did represent their understanding at the time, but that understanding is changing on a daily basis.

    I’ve tried to share as much as I know in the article and believe Joe’s information concurs with our own. So, we know how things happened and where they are now, but nobody outside of the new Proton board (for now) can really confirm what will happen next.

    I get the sense that there are plenty of interested parties who wish to see Lotus succeed, but the sticking point lies in the financials (I.e. how the companies long-term debt is dealt with in a separation deal – and indeed, whether that debt lies on GL’s or Proton’s balance sheet).

    I therefore do NOT believe this is another Saab (for the moment). Whilst the info we gained from DRB-HICOM is that they’re looking for a quick solution, Lotus is still perceived as a business that should continue (provided a deal can done).

    Discussions are ongoing this weekend and we may hear a statement either from Lotus or Proton soon.

    1. I do not agree about the press release. I firmly believe that the changes were known before that was released.

    1. Born in Istanbul on December 17, 1971, Taner Bahar emigrated to Switzerland with his family when he was a child. They settled in the town of Silvaplana, near St Moritz, close to the Italian border, in the east of the country and in time he became a naturalised Swiss citizen. His background was relatively humble and he began working in a ski and cycle shop in his teens. This led to a meeting with a former sports journalist from Zurich called Coni Altherr, who had established a consulting firm called Iguana Think Tank AG in 1995, his aim being to develop media rights sales for a rollerblade event around St Moritz. He went on to establish the European Inline Cup in 1999, with funding from Playlife, which was a Benetton-owned company. This deal was sourced by Bahar. By 2000 Bahar had become involved in the organisation of a series of speed skating events. This brought him into contact with Sabatino Aracu, an Italian politician who later headed the Fédération Internationale de Roller Sports (FIRS). Bahar went to work with Aracu in Rome for a short period before moving to Dubai where he was involved in developing a computer company. It was there in 2001 that he met Fritz Kaiser, a highly ambitious Liechtenstien lawyer who had been involved with the Sauber team in the late 1990s. Bahar started working for Kaiser. He also marryied Annett Johansson, the daughter of Norway’s Bjørn Johansson, the boss of one of Europe’s most successful executive search companies. Having met Dietrich Mateschitz through Kaiser, Bahar convinced the Red Bull boss to take him on as the company’s Head of Corporate Projects and joined Red Bull at the end of 2003. The following year Red Bull bought Jaguar Racing from the Ford Motor Company. This was transformed into Red Bull Racing in 2005 and the following year Bahar launched Red Bull into NASCAR. He was fired by Red Bull in February 2007 for reasons unknown. He moved to become head of branding at Ferrari. He became heavily involved in an attempt by A1GP boss Tony Teixeira to buy either Spyker or Scuderia Toro Rosso to become a Ferrari B Team. After that failed he announced a new project early in 2008, to supply Teixeira’s A1GP Series with a chassis based on an old Ferrari F1 design, Ferrari-badged 4.5-litre V8 engines and use of the Ferrari brand. At some point in 2009 he began negotiating to run Group Lotus with an ambitious project to turn Lotus into a new Ferrari. He became chief executive officer of Group Lotus, effective from October 1, 2009.

  9. Rolling over a loan is the same as taking on a debt, which, however you look at it, is the same as making a loan.

    1. You are right and this is one point which Joe has got wrong. The loan agreement is on the formulaoneupdate blog and Proton’s name is on them.

        1. OK so now I’m really confused because you say that you have been told that Proton has not made any loans to the Lotus F1 Team. Have I missed something?

            1. Not sure it matters who gave the loan in the first place. If you buy a house from someone it is still your house even if you didn’t build it or weren’t the first person to buy it. All the matters to Proton’s bee keepers is that their name is on the loan now and that means its theirs. It makes no difference

  10. Given that Lotus Cars never makes any money, and Lotus Engineering is the profit centre, and the people are the key part of that, I can’t see how they’ll be able to move it away to China without taking the people with them, which won’t happen.

    When Proton bought Lotus the expected outcome was that they would use engineering to make their own cars a higher quality and then sell the company straight after. That they didn’t immediately was a surprise. I’d imagine this is what will actually happen this time…

    1. Agreed Phil,

      But they’ll take the name and slide a 3 wheeled ‘Wuxi Diaspora GT’ (or somesuch) underneath it and sell it in China as the latest Lotus.

      I would !

  11. ‘……obvious solution would be to find a way to lose the debts and then allow G Lopez of Lotus F1eam to take over Group Lotus,thus securing the jobs of the staff at Hethel ,reuniting the F1 team with the car company and getting Lotus in a position from which it could prosper rather than seeing the Lotus legend sold to the Chinese…..’ Joe please explain: When the Chinese take over,why are the jobs at Hethel are’t secured? and when Lopez with his Genii company do this it is no problem.And what’s the difference between the Lotus legend sold to the Chinese or to the people from Luxembourg.And is there still a so called Lotus legend?.And besides from what I read from your stories on Genii it is al about loans,loans, loans ….

    1. I think the point is that while Proton bought Group Lotus, they wanted to keep Hethel open to provide them with technological assistance and to try and make the Lotus car business profitable. Any Chinese purchase, however, would most likely just take the brand and any useful technology and move it to China, before closing the Hethel site.

  12. Joe,

    Your explanation makes alot of sense and I don’t doubt a word of it. I think your sources have nailed this one. Reading between the lines its as I expected it was going – in very general terms.

    It seems to me that everyone is now working to unravel the situation in a way that will keep the most people happy. Which is par for the course on occasions like this.

    Of course, a number of people – usually senior management – will become surplus to requirements very quickly.

    Cameron’s ‘speaks with Razak’ are probably timely and may yet save Hethel from being cast aside. At least the distress rockets been fired !

    Would I be right in assuming that as the Chapman family threw their lot in with Bahaha, in the event that Lopez does not get Lotus, the racing team name will go with the rest of the company. Assuming that’s to (lets say) Chinese owners, it’s then out of reach for use in F1 isn’t it ?

    1. Yes, the Chapmans fell for Prince Charming. If the Chinese get it, I doubt there will be a Hethel because they don’t need it. They just want the name and the technology (without the debt). However, I think the governments may now head that off at the pass.

      1. Have you been to Longbridge lately, Joe?

        There’s now a very small factory, a new College campus, and an awful lot of wasteland even a decade on.

        I wonder if Bahar’s name will join that of the Pheonix Four in ignominy.

      2. The jewel in the crown for Lotus is the engineering department – division. They are world class, and the technology skill set they have with a number the key staff members is the value, plus of course the patents that Group Lotus own.

        Yes you can move – close down the factory, and shift the equipment to China, but the skill set that these people have is the key important bit, not sure they would be willing to move. So wherever they go, will be the winner in the end, not the Chinese. (pls no digs at where they might go against Joe this time)

        Currently right now we are seeing mega deals on buying up mobile phone patents, and legal cases claiming billions of dollars against all the major players including the Social network sites.

        Most of the debt – loans are out of the UK, but there a few here, and so far, no gossip or rumours about not been paid, so far…

        I am more concerned about the debt that the F1 team has, and wonder how much Genii has really put into the race team.

      3. Thanks Joe. Have a good day at the races.

        Agree re Hethel. Wouldn’t even be worth shipping the jigs. The tech could probably go back on a couple of healthy lap-tops and within 18 months you’d find that the ‘JiangJiang GT’ had solid dynamics, a more efficient more reliable engine, an eco/hybrid alternative in the pipeline and a good energy recovery system.
        It would probably still look shit though and have a really tacky badge.

        Lotus would be badged on the JiangJiang (‘dynamics by lotus’) but as a company would cease to exist. Making it absolutely pointless to stick their name on your …………well anything really. The name value would be zero. The history would live in Nanjing or somewhere. (We could all visit the Lotus GP museum there when in China !!)

        Interested to see how they head this off though. The only way that I can see it working is if the new owners (in conjunction with the old and the Malay Govt) write off or absorb in major part what is effectively Dany’s debt. Start to think of Lotus as ‘Hethel’ (its the only way its going to work) and sell that on effectively ex (most of the) debt to a buyer looking to operate Hethel as a small tech facility using a realistic growth and product plan, and at the outset substantial support from the UK Gov’t.

        Genii would be good, and so would (irony of ironies) Caterham – esp with the Leafield centre up and running.
        In fact – and I will now be crapped on from a great height by some of your bloggers – Caterham would probably make the best immediate use of the technology and resources and offer a quicker path to recovery because of the synergies.
        Genii would be OK too longer term but I think slower on the immediate uptake. Although we would then have a (more) real Lotus team in F1 – on paper at least.

        BUT – What incentive does anyone have to help Lotus and/or scrub the debt. I guess only that without a deal they won’t get any money at all.
        But if it does come to a bidding war the Chinese will win – if they could reduce the debt so that they had a ‘deal’.

        Lets hope that Dave can persuade our malaysian buds’ to pare off Hethel.

        Bit rich though – we walk in, run their country for 80 years while shipping out all their natural resources, fail bravely but dismally to protect the peninsular when hostilities break out (and I don’t mean the hotel), bugger off in 1940 odd and not trade effectively for a further 35 years, and the first time we go back we say…………………………….’here, do us a favour’ !

        1. Interested, actually we kept ourselves in Penang, and Labuan and a few other posts, and never directly ruled Malaysia until much later. As a result of this lots of cool things happened, the Dutch could get involved (particularly in Kuala Lumpur, “city of tin”) and the rubber seeds we brought over from south America via Kew were planted out by Chinese immigrants and all sorts who came in. There was a entrepreneurial boom. By providing a center of regulated commerce, there was trickle down. Direct rule, from 1946, was a result of the Japanese wartime invasion, and response to ongoing unrest. It would have been preferable not to take over, but there weren’t so many great options. The very fact we had catalysed a very open and free run state also had its disadvantages. The good legacy of British involvement was encouraging a diverse state with considerable trade links and hereditary connexions to neighbors.

          I’m by no means even a amateur historian, but at least pre WWII we were pretty enlightened as to Malaysia, and it’s a good model to consider in terms of resurrecting broken states: just provide a enclave where law of property works, and a route to market. In some ways, the Chinese are trying to copy that method in Africa, but with very uncertain success, because they do not understand cultural pluralcy.

          I actually am tempted to agree with you – as armchair observer – that Caterham might do better taking over, if only because they will be less traumatized my corporate dissipations.

        2. Interested Party –
          We need to remember that the loans – debt that Group Lotus has, were for developing a new range of models, in which Proton, rightly or wrongly signed off on. It does take a lot of money to develop new models. Therefore the question is how far down the road is Group Lotus on these new model development? They have spent funds and therefore should have something to show for it. It could be a better deal to finish off the development on the models than to pack it in. Remember the jewel in the crown of Lotus is there engineering skill, so I would expect to see a fair amount of work done, which does have some sort of value.

          As for the loans, surely DRB-HiCom, in doing the due diligence would know about these, and the Board of Proton who signed off on them. They would have factored into their purchase of the Malaysian government shares the problem loans, or maybe no problem.
          I cannot see the Banks who provided the bulk of these loans to take any sort of haircut on them, as these same Banks most likely provided funds for DRB-HiCom to buy the governments shares in Proton.

          So what sort of deal can be done? I would think the Banks might exchange some of the loans for shares in a new Group Lotus, with a view to float the business in a few years. It reduces the interest and capital repayments and looks after the companies’ cash flow. I would finish off the development of the new models, but cut down on the new range to 2 models or less. I would license the Lotus name to China and get in some funds. The problem is the brand can get diluted down to nothing, as we have seen for example with Lotus 123 and Lotus Symphony which IBM purchased and now is nowhere, Plus IBM sold off a division to a Chinese company and they changed its name, and used the technology to launch a new brand.

          He was able – somehow to recruit a number of very talented car people to an advisor team, on helping develop the new model range. These are pure car people and would know if they put their name to the company that it had the means and the project had legs. Unless we think they were all hoodwinked by a slick marketing person. Therefore they must have something of value in what they have spent the funds on. It hasn’t been totally wasted, as been portrait in a few blogs.
          So there is debt, but something of value there also. One would hope.

          1. Keith,

            if you put Caterham, Hethel and Enstone together, and Catherham in charge, I’d buy shares.

            But it’s all the wrong way around presently.

            If you think it through, you just don’t want ailing, politically muddied Proton in charge of so much good capacity and talent we are rightly proud of.

            The solution is to tell Proton it can by all means be a part, but as a licensed manufacturer, or in a JV like the Renault – Nissan alliance.

            Get our lot designing cars, which is what they yearn to do, and can do well. Have Proton build them under watchful technical eye. M’sian govt has to stump up enough working capital, and deliver us real meaningful trade and tariff breaks, oh, and wipe out these debts which seem to be nothing more than destructive bargaining chips (poorly played, at that, because they seem to have purpose only behind closed doors and not withstand the light of day) and for that they get some real advancement of their motor industry.

            For face, by all means let them claim their national champion manufacturer now has possession of a deep pool of British technology. Yes, let them call all of it Lotus.

            But they should not be permitted to have control. Love her or loathe her, Maggie would have kicked some backside on this. The conditions should be UK based board, UK articles of incorporation, and to save face a dual listing. To be honest, AIM, not the main list is the appropriate place for a group this size, but you can use the less stringent section rules of the main market if having a LSE ticker is all important for show.

            Then, *then* we can gladly throw any amount of development grants and funding at this, because we will actually gain the benefit, not see it siphoned off into some mysterious political mud wrestling game that I am not sure has anything formally to do with the actual Malaysian Government beyond the fact they must be as exasperated as we are at all the stupid hopeless games.

            1. John (other John)

              If the Banks wanted to play ball and DRB-HiCom did not want Group Lotus, then I would spin it off, with the Banks taking some equity in exchange for reduced Loans and a holiday on capital repayments. I would float it on the London Boards.
              The main problem that Lotus has had over many years, and I speak from owning one of their models is the final product and quality control. Lamborghini had the same problem, but Audi was smart enough to bring that element to the finish product and leave them to the design & engineering.
              I am not a fan of the current model range, but the new models that were showcased looked interesting, but widely over ambitious and costly to produce. As Proton has shown, they are not very good managers, or good strategist either.

              I would keen to hear what the team of special advisors have said and what has been there input into the new models. Some very clever – smart people in that group, which I have a fair amount of respect for in the car industry.

              As for the F1 Team, I believe the current owners are only in it for the short term gain, not long term players, and big question marks over there actually funding in the operation.

              1. Keith,

                In this one I do not think the banks are important at all. As Joe pointed out the SNORAS loan has no schmolatteral. They are just cups being played about.

                No way is this VW league either, that integration took Peach 50 years to plug away at. Let’s just imagine it will be viable in 10 and plausible in 20, IF everything is done right. These are real industries, and I hate to keep harping on about that but who suffered first with GM was Lear, the components supplier, and we’re into trashing hundreds of thousands of lives, but oh, okay GM was saved! Hethel is important because it is a base around which a part of out people congregate. But way beyond that, if you get serious, there could be dozens of Hethels supplying a Proton which for reasons of immigration connexion may have a chance to sell to China a fresh product,

                Nobody need special advisers, they need special ops. Someone to go in and get a proper act on. You just never know what is lurking around a good design shop, unused or unloved by management. Hey, if my pal gets his wish, they can all go chill out and regain their mojo on a new golf course and business complex in Kelantan!

                What is cool when you get real engineering in the same milieu is that so many other things happen nothing to do with what you set out to do, just because there’s talent there and real talent never wastes a moment of a day, they want to build things, anything. Actually Kelantan is a bit of the Norfolk or Malaysia, very pretty, whopping open spaces you just can let yourself go in, locals considered backwards! Of course nowadays you can have the wall opposite you make it look like someone 10 thousand miles away is right there opposite your desk. It would be awesome to get all this brainpower free of the clutches of political masters and business manipulators.

                Actually I disagree with you, I think Lopez has found something of real value, and he will hold on, maybe trade up. Renault were very generous when they let that team go, lots of good stuff. But when I banged on about how Oracle should be sponsoring F1, I think Lopez may have listened, because Microsoft Dynamics is a direct competitor to Oracle. Okay, might not be real serious money, but I think the guy has chops, even if I just like him for “nicking” my ideas. The few VCs i’ve known – well even those I hardly know are industrialists manqué. Every man worth his salt wants to build something big that can last. I might trade print ad slots, but what I want to do is change the way people publish economically, give them a terminal at which they just say what they are selling that week, and get back to writing. Everyone wants to do something really for real. For Lopez or Tony to shine you have to get rid of whoever is messing this about. I reckon for Tony that means getting a political monkey off his back. You don’t survive being all blah blah blah like he has done.

                Single thing I want is to get this off the F1 RADAR set. Go fix it direct, face to face, not play it out like is going on now and is very distracting.

    1. I know nothing of soccer. The last time I had any real interest West Ham beat Fulham in the FA Cup Final.

  13. OK…. I’m confused now. Who owes money to who. If Proton have paid off a debt that the team had then why is there a security? That says to me that the debt has really been re-financed with the race team now endebted to Proton rather than a bank.

  14. After Genii buys Group Lotus, then gets a deal with Renault to rebrand the engine and remove that Renault from the name.

  15. Ok I take back one of my previous statements, BBC and an MP here in Norfolk say the £10million UK Govt money for Lotus has been “suspended”, not sure of that means some or all, maybe some has been paid, who knows.

    1. Adding “High Level Government Departments” to my mental distribution stats for this blog 🙂

      I mean, come on, how many seconds does it take for a Cameron aide to check reactions and arrive here?

      (assuming a hypothetical intelligent Cameron aide)

      Maybe they should have been a little better prepared. But between unpaid interns and the usual smug smog smirk of lackeys i doubt could have done my first tea boy job but are paid like successful business owners, I’ve comes to expect no better. Only the PM’s office, innit?

      Thanks for the update, Nick.

  16. Is history repeating itself here…Didnt the UK government previously give “lotus” money(via De-Lorean) and look how that ended up…

    1. Ouch. DeLorean. Good call.

      The difference is, deep breath:

      DeLorean was headed up by an Eastern European born chap who naturalised himself in a country sharing borders with Germany and Liechtenstein, an egotistical guy with a smart haircut and expensive suits who thought he was a big shot and who had passed through high profile jobs with large car companies before trying to mould a British based sports car manufacturer strongly linked to Hethel to his liking, bringing in old friends and colleagues on hugely inflated salaries, running up huge debts in the midst of poor sales and taking UK Government funds for projects that he failed to fully deliver on, whilst also entangling himself in contractual obligations regarding Renault, whom he failed to pay, and taking what looked like a potentially successful sports car company into bankruptcy and costing over a thousand jobs, all in the space of just two years.

      Unlike Lotus Cars which is run by Dany Bahar (it is claimed).

    2. I thought the FBI also donated a lot of marked bills in a hotel room, also! I hope Danny hasn’t been on the fanny.

      Oh dear, you’ve really got me thinking. I mean sometimes you look at a business and the only explanation for all the hysteria does turn out to be there’s something crooked. Please be it not so, ‘least for the sake of Hethel.

      But you do think just that bit more, when a company is clearly a political puppet, where the money might be going. I once very briefly worked for a company that was a right basket case. Almost no-one there not ex forces (from all over) and even a very young me thought it fishy the shelf of books on insolvency practice on the finance chief’s wall. Years later I was informed the who had started that firm were implicated in dodgy finance for Benazir Bhutto. Glad I ran soon as my signing bonus check cleared (They were even too sloppy to force me or anyone to sign a contract, and things got far far weirder than that I tell you.) Thing is, we simply don’t know what is going on in the exec offices at GL, and I know from watching other firms go down that perfectly normal sensible people act up all too easily, if unwillingly, but out of compulsion, false duty, desire not to believe, when a company rots from the inside.

      Maybe the M’sian govt raising the profile of GL in the context of a PM’s visit is going to backfire?

      Then again, we don’t know that Cameron did discuss any of this. Putting my tin foil hat away now, because it’s simply impossible to know all the possible motivations, and nothing at all tells me that the mental state inside GL or around it is healthy.

      1. I was just being a smart alec with the similarities – (thanks Wikipedia), wasn’t inferring any criminal wrongdoing, it’s bad enough as it is! lol


        1. Did you ever see the documentaries with the law enforcement tapes?

          I’m not either meaning a thing specifically about Group Lotus, or any of the participants, for all we know they are simply hunky dory. Or just taking a little holiday on the slightly too sunny Do Lalley Coast. But there is enough money, in this whole game, to make people more deliberate. And if you are deliberate, you are careful enough not to put your face and name to your machinations.

          When hit fits the shan so consistently at this, I really do wonder where the energy comes from. To many actors, too many plots, too many sub plots. Way too little factual information or data. Just take one normal thing: where are the reports of work in progress, the designs a car company should be all about? Way too much character invective, such as that press release having a crack at Joe. I mean, really, that smacked of GL being scared of Joe and Caterham and therefore Tony. How does that work? I did think Joe was hammering them too much. As in , dead horse, so forget it, was my view. But they are a legit target. Now at one time, things in Malaysia were a much happier family. I mean Tony was to go get, then that failed, and far less useful than a Plan B was instigated. What are this lot scared of? Probably themselves. Sometimes sowing chaos can work to your advantage. But this situation is way beyond diversionary chaos, I think it is in a destructive spiral. I also think it risks all who it touches, Caterham and Enstone as well. If nothing else, it is so distracting of energies, I winder how any of them can function normally, We already have the answer to that looking at GL.

          But I’d bet they are worried what Tony knows. Very hard for me to explain my position, but if you sat down to tea with me I could open files that would make your head spin. I have been afflicted by corruptions that go right up and down, real news resulted from the numpties who drive by my life and splurted mud up from the gutters of life. So I know you can never pinpoint anything even if you have a smoking gun. It’s the smoking gun which ensures your future safety. Yes, it gets that rough. You don’t expose something by making a Panorama docu ten years later (telly has Panorama on Glencore just now, and it’s a poor analysis) the only positive thing you can do is work to erase the bad memories and undo any harm and replace what rubbish went before with better. (Just on the Glencore thing, why is is *always* that so called investigative media wait 20 years to “investigate”?) My instinct says that is why Tony sits aside quietly now. My instinct is also worrying about Joe in all of this. He’s no patsy for anyone. But someone around GL, or maybe somewhere else in this murky lot, sure want him to be fall guy. And no way do I believe even TF is fully aware of everything, let alone Joe. I believe something is rotten, really rotten, somewhere. That means innocents will get hurt. That’s why it’s important to keep pushing to ask what is going on with this mess.

          This is an appalling sideshow to F1, and it’s been created by and permitted by all involved. It needs to be stopped, before too much talent and potential is flushed down the drain. I wrote my positive hope above. Bang heads, merge it under undistracted management, Lopez has chops, Tony can hold a fort, engineering is there aplenty if they will stil be there . . just get rid off all this nightmare. It scares me from afar. I daren’t think how my life would be working for any of these companies. You are *responsible* for who you employ. Companies are not playthings. And if you think differently, F1 is going to remember this for a long time, so unlike soccer clubs whose fans may be used to being cynical and all change all the time, the fans are different here. So, if this was ever a cynical ploy to use F1 to assemble assets on the cheap and pinch a handful of the best prizes in British engineering, well others are already writing your bios and legacies for you, and they are not complimentary. Maybe in another game you could muck around for years more and not suffer such opprobrium or attention, but hey, F1 is fast . .

    1. Great, another govvy department acronym!

      I’ve been lost since they stopped to simply call it the Department for Trade and Industry. Used to be so simple. Need some help? Call the Country Desk. You’d find someone who plugged away at all nature of business with that country, and so who had wide experience, and some clout. It’s so diluted now. I just looked at the UKti website, trying to see if there’s anything of interest. But they’ve split “creative and media” and “advertising” into even more sub categories. For crying out loud, when I want to sell advertising, I want to know about actual industries in wherever I am selling to. A bunch of people who think they are working in “the creative industry” (geez) are no use. You want a hard nose whose been around the block including working in something that’s muck money and hard labor, because that’s where the money comes from. I hate this treatment of advertising as an industry. No, it gets its money from industry. I therefore want to chase and sell to and learn about proper business, not spin helplessly in circles of media studies graduates proclaiming how wonderful our “service industry” is. Gah, another misuse of the word industry.

      Linked article says, “Ukti was formed to help British-based companies succeed in the global economy and attract high-quality investments to Britain.”

      Oh, come off it. Just get back to having some people on a desk who have some real nous who you have a chance to speak to and ask when you need direction. I suppose all this dissipation of knowledge, and thereby dissipated prevention of accumulation of new knowledge, is called an “initiative”. This is the modern government style that does in fact see the point of e.g. centralised databases, so why can they not see this? I guess it is the arrogance of privilege. Having a civil servant position is the new easy.

      But it does make me think, hmm, just maybe since the old department for trade is gone, people need a better replacement. Since I like real business magazines, (since i discovered they exist as a boy not yet growing fluff on my lip) maybe there’s a way to use that which can be made accessible to who is in need?

      No doubt I am hacked off at our moronic and pathetic attitudes to commerce, so maybe I should work on venting that frustration by filling these gaping holes that make swiss cheese out of common sense? Hmmm. I know if I do, though, oh, I know this, I can just feel the barbs flying at me already that once I have a choice in the matter, I’m off to live in Paris, so I’ll just be another expat tax exile vulture or some such . . . a self interested commercant lecturing from afar . . just can’t bloody win, eh?!!

  17. I’ve just seen a new article. Copy/pasted this small portion.


    Now, in a further twist, the EDP has learned that Group Lotus boss Dany Bahar was instrumental with another director, Azman Bin Abdullah, in registering a new joint venture, Lotus Youngman, at Companies House on January 13, three days before the sale of Proton was announced.

    Lotus last night said Mr Bahar was unavailable to comment as he was heading to the Beijing Motor Show with officials from China Youngman, which imports Lotus cars.

  18. Very disappointing, just been to the Lotus facebook page to have a laugh at the almost totally unsupportive comments posted under their little rant…and it’s has been removed!

  19. Anyone believe in strange fate or signs from the motoring gods?

    Coming up at 2.15 GMT on BBC Radio 4 in the UK (or on payer if you’ve missed it) – a new drama, all about the DeLorean fiasco…… lol

  20. Hmm ITV are reporting a “new senior manager” has been appointed at Group Lotus. No more than that but it’s interesting. Will that be a senior manager working under Dany Bahar and if so what’s the point of that…..or….

  21. Ouch, I was just posting as a matter of interest, wasn’t trying to divert you Joe, just thought some of the other posters might be interested. Excellent reporting from Bahrain which I’m sure we are all following with interest.

  22. Now that Bahrain is over…

    Is this a “It never happened” or a “We’d better respond to Davide Cameron et.al.”?


    KUALA LUMPUR, 21 April 2012 – Following numerous reports in the media on Lotus Group International Limited (Lotus Group), a wholly-owned subsidiary of PROTON Holdings Berhad (PROTON), DRB-HICOM Berhad (DRB-HICOM) as the new owner of PROTON would like to clarify some important matters.

    DRB-HICOM is currently undertaking an operations audit on Lotus Group, as part of its governance exercise. Contrary to reports that Lotus Group would be put under administration, DRB-HICOM is still supporting Lotus Group, both financially and management wise.

    DRB-HICOM has not decided to sell Lotus Group and do not know the source of the speculation about selling Lotus Group to a Chinese party i.e Youngman. As of today, DRB-HICOM has identified one of PROTON’s Senior Management personnel to take up a position in Lotus Group in an effort to strengthen its management.

    – End –

    DRB-HICOM Berhad is one of Malaysia’s leading conglomerates with core businesses in the Automotive; Services; and Property, Asset & Construction sectors. DRB-HICOM’s aim is to continue adding value and propelling the nation’s development. In the Automotive sector; DRB-HICOM is involved in the manufacturing, assembly and distribution of passenger and commercial vehicles, including the national motorcycle. In Services; DRB-HICOM is involved in various businesses, including concession and financial-related services. In Property, Asset & Construction; DRB-HICOM is involved in residential and commercial developments.

    For further information, please contact:

    Sulaiman Yahya
    Head, Corporate Communications
    DRB-HICOM Berhad

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