Lotus boss sacked

Dany Bahar, the CEO of Group Lotus, has been suspended by the new owners of the parent company, DRB-Hicom.

Bahar was deeply involved in the controversy concerning the two Lotus teams, beginning in 2010, when Lotus Racing was racing in F1. That team later became Caterham, but Group Lotus had a deal with Tony Fernandes, the team principal of Caterham, to use the Lotus branding. Fernandes wanted to use the Team Lotus name and logo for 2011, but Proton, the previous owners of Group Lotus, said no. A court case decided that Fernandes could use the Team Lotus roundel and the name, but not ‘Lotus’ on its own. Read more on that here.

Today the announcement came, that Dany Bahar has been suspended from his post,  “while an investigation is carried out into a complaint about his conduct.”

A statement from Group Lotus read:

“As a result of a number of media inquiries, Group Lotus plc (“Lotus”) can today confirm that, following an operational review, chief executive Dany Bahar has been temporarily suspended from his role to facilitate an investigation into a complaint about his conduct made by Lotus’ penultimate parent company, DRB-HICOM Berhad.”

“The penultimate holding company would like to stress it is business as usual at Lotus. We fully support the company and will continue to support Lotus in its business endeavours and development.”

Group Lotus responds to rumours

As I said a few days ago, the Lotus F1 team is no longer sponsored by the car company by the same name. However, Proton, the owners of Group Lotus, has issued a loan of £30m, under the condition that the team itself has been put up as collateral. If the loan is not repaid in time, Proton will take over the team.

A statement reads:

“Lotus F1 Team and Group Lotus have reshaped their commercial relationship earlier this year. The new governance agreement signifies the continued commitment of Group Lotus to the team and the sport.

“Group Lotus’s branding and marketing rights and subsequent activities remain unaffected by the new agreement until at least 2017. Alongside continued branding and title partnership status, Group Lotus is also the exclusive master licensee for all Lotus F1 Team merchandise.

“The new agreement was reached following Group Lotus owners Proton providing team owners Genii with a £30m loan which is repayable within three years. In order to secure the loan, Genii used 100 percent of the F1 team’s assets as collateral, meaning that under the conditions of the loan agreement Proton have been given full title guarantee to all plant, machinery, show cars, computers, office and the Lotus F1 Team headquarters.

“In addition, Proton retains the rights to purchase 10 percent of the F1 team. Another 10 percent share option will be activated if the team default on their loan obligations with Proton.”

At the same time, you could read a longer and rather bizarre statement from the team itself, dishing out un-disguised content for several people, including Tony Fernandes, Joe Saward and others. The statement is here in its entirety:

Take a little look at what we found online. Don’t you think it’s funny? We do. We had a good old giggle. After all, we love a bit of self irony, just as well really. Although it’s funny, this one’s not accurate but then again, why let the facts get in the way of a good story? The inconvenient truth is–surprise, surprise–we have never said that there are no problems at Lotus.

So whilst lots of people obviously feel the need to comment on Lotus’ current situation in the absence of proper facts or evidence, we can’t ignore these particular mistruths any longer even if we would like to, so we have decided to turn a negative into a positive and use this hilarious piece of ‘art’ to set the record straight regarding the status quo at Group Lotus and try to return a little stability to a fast changing situation.

False rumour #1: Dany Bahar is no longer CEO of Group Lotus.

Fact: Rubbish – Dany Bahar still is.

False rumour #2: Dato’ Sri Syed is no longer Managing Director of Proton.

Fact: Again rubbish. He still is.

You can thank good old Tony Fernandes for these two. Don’t take everything he tweets too seriously—perhaps he’s still frustrated about owning Caterham instead of Lotus and the fact that he fights HRT and Marussia instead of Mercedes and Ferrari in F1.

And whilst we’re on the subject of jokes—do you know the latest F1 joke? Mike Gascoyne, Caterham Group’s Chief Technical Officer, has gone missing. Why? He’s looking for the 30 to 40 points he predicted for the last F1 season. Funny.

Speaking of F1: It seems that one special so called ‘independent’ source is at the root of the lion’s share of damaging rumours and misleading stories. The delightful Joe Saward which leads us nicely to…

False rumour #3: Joe Saward is JUST an independent journalist.

Fact: He is an active Director for the Caterham Group.

And unlike some, we don’t want to get too personal, so we’ll leave it to you to judge how ‘independent’ his stories about Lotus are.

False rumour #4: Group Lotus is no longer involved in F1.

Fact: Lotus F1 Team and Group Lotus have reshaped their commercial relationship earlier this year. The new governance agreement signifies the continued commitment of Group Lotus to the team and the sport.

Group Lotus’ branding and marketing rights and subsequent activities remain unaffected by the new agreement until at least 2017. Alongside continued branding and title partnership status, Group Lotus is also the exclusive master licensee for all Lotus F1 Team merchandise.

The new agreement was reached following Group Lotus owners Proton providing team owners Genii with a £30m loan which is repayable within three years. In order to secure the loan Genii used 100% of the F1 team’s assets as collateral meaning that under the conditions of the loan agreement Proton have been given full title guarantee to all plant, machinery, show cars, computers, office and the Lotus F1 Team headquarters.

In addition Proton retains the rights to purchase 10% of the F1 team. Another 10% share option will be activated if the team default on their loan obligations with Proton.

Again we leave it to your judgement how ‘bad’ Lotus’ current situation in F1 is. And speaking of bad situations…

False rumour #5: Group Lotus is going into administration.

Fact: Rubbish. The takeover of our parent company Proton by DRB-HICOM couldn’t have come at a worse time, but up until that point Proton was (and still remains) fully committed to our five year business plan to create jobs and to expand the factory and business. With the takeover process the funding has been restricted and DRB-HICOM is taking time to understand what to do with the business. DRB-HICOM is currently in the middle of due diligence of Group Lotus and there have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-HICOM both here in Hethel and in Malaysia. At no point has DRB-HICOM indicated to Group Lotus that it intends to put the company into administration. The over-active rumour mill is seriously damaging our business reputation, image and credibility but it is what it is.

The simple fact is, and we haven’t denied this—Lotus is going through a very difficult phase at the moment but we are showing true fighting spirit every day in trying to keep this vision alive. This is also a fact—no matter what people outside of Lotus may say or tweet or blog.”

Lotus drops F1

Kimi Raikkonen and Romain Grosjean are no longer driving for Lotus.

The title sponsorship between the car manufacturer Group Lotus and theF1 team Lotus F1, have been terminated, said chairman of Lotus F1 Team, Gerard Lopez. Raikkonen and Grosjean are still driving for Lotus F1 Team, owned by Genii Capital, but this only represents the Lotus name, and nothing more.

Say what? Yes, it is all very confusing. remember back in 2010 when he heard that Lotus Racing would be back? But that they would be called Team Lotus from 2011, but that failed becaise Group Lotus told Team Lotus that they dodn´t want that, so they went to court and Team Lotus said they won over Group LOtus, but Group Lotus said they beat Team Lotus? So just to re-kindle some of the ‘magic’ we all love so well in the tragic which is Lotus vs Lotus, here are some highlights:

Genii Capital bought a majority stake in Renault F1 Team back in 2009. The idea was to bring renault back to their old winning ways. Renault kept 25% of the shares, but in 2010 sold their lot to Genii Capital. Group Lotus became title sponsor, backed by Proton, a deal which meant that Group Lotus(those are the guys with Dany bahar, Eric Lux and Gerard Lopez, not to be confused with Tony Fernandes´ Team Lotus, wcich is now called Caterham) became a huge partner in Lotus Renault GP, and remain as title sponsor until the end of 2017.

So for 2012 Lotus Renault GP now changed their name to Lotus F1 Team, an agreement made between Fernandes and Bahar. However, two months ago Syed Mokhtar Al-Bukhary´s DRB-Hicom bought the government-owned Proton, remember they own Group Lotus, for $400m, and whilst carrying out the post-acquisition due dulligence, froze the assets of the business, including Lotus.

Proton has been in deep financial distress for years, losing money mainly due to Group Lotus, which hasn´t made money since the mid-90´s. In January of this ywar, Lopez said that Genii Capital was committed to Lotus F1 Team and in february he said that the company might be interested in buying Group Lotus, “provided they believed there is something good that can be done by acquiring the company”.

It looks like there might have been some sort of exchange of words between Lopez and Bahar, resulting in a failure to deliver the money need for the title sponsorship, and as such Genii Capital can rightly terminate the agreement due to a breached contract.

There is no way the otehr teams will accept another name change this fast, expecially since the last disoute went to court, with both sides claiming a win. And remember back to 2010, when Fernandes said that the Lotus name was back in F1? Now it seems that from 2013, the Lotus name are once more gone.

Genii Capital might be looking to buy Group Lotus, but don´t expect Tony Fernandes to fork out the cash needed to re-purchase the Lotus name, a right he gave away the second he changed his team to Caterham. As Steve Davies, of Skiddmark, writes:

“Lotus 5-year ‘New Era’ Business Plan was never viable [...] – not in the real world. For a business that hasn’t turned a profit in 15 years, whose plan depended on £360 million in funding from Asian investors (£120 million from Proton) and needs to generate £110 million (extra) from sales of its own cars, success was always based upon ‘the most optimistic’ of scenarios.”