Proton says not selling Lotus
KUALA LUMPUR, May 29 — Proton has denied rumours that it is planning a sale of its sportscar unit Lotus, insisting the loss-making brand can still provide value to the national carmaker that was recently taken over by DRB-HICOM.
Executive chairman Datuk Seri Mohd Khamil Jamil insisted in a statement last night that Proton and its holding company controlled by logistics tycoon Tan Sri Syed Mokhtar al-Bukhary had plans to take Lotus “forward in the immediate- to medium-term”.
“Lotus can provide value to Proton. Lotus is an iconic brand with global presence and positioning, coupled with unsurpassed engineering expertise and a talented workforce.
“Both Proton and DRB-HICOM will continue to review the existing business plans and financial position of Lotus in taking Lotus forward in the immediate- to medium-term,” he said, adding that the parent firm sent a team of consultants to Lotus in March to conduct an operations and legal audit.”
He said the need for this review is especially pertinent in light of the existing financial obligation of Lotus in the form of a £270 million (RM1.33 billion) syndicated loan taken at the end of 2010, for which Proton has given its corporate guarantee.
He also added that his recent visit to Lotus’ Norfolk headquarters has resulted in the British government considering a £10 million Regional Growth Fund pledge to support Lotus’s vehicle development plans there.
Rumours of the sale gained momentum after state asset manager Khazanah Nasional Berhad’s sale of its 42.7 per cent stake in Proton to DRB-Hicom in January.
Lotus is wholly-owned by Proton and is currently in the second year of a five-year turnaround plan that could see the firm incur more losses in the coming years.
According to previous media reports, Proton’s higher spending on the iconic Lotus had seen the national carmaker’s second quarter net profit last year slump by 76 per cent to RM15.55 million from RM65.92 million in the same period the previous year.
This comes after news of Lotus chief executive Dany Bahar’s suspension has been circulating for about a week with British motoring magazine Autocar reporting that the UK-based outfit refused to comment on rumours that the suspension is related to expenses incurred by Bahar.
Proton, however, confirmed that “following an operational review”, 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 Edge also cited internal sources as saying that the contracts of several top officials in the carmaker have lapsed and major management changes will take place next month.
The financial daily reported that managing director Datuk Seri Syed Zainal Abidin Syed Mohamad Tahir is to announce his departure this Thursday after the board accepted his resignation letter and that there is growing speculation chief financial officer Azhar Othman has also quit.