Fired CEO Bahar Files Claim Against Lotus

Former Lotus CEO Dany Bahar
Dany Bahar, former chief executive officer of Group Lotus Plc. Photographer: Gabriel Bouys/AFP/Getty Images

Dany Bahar, sacked as chief executive officer of unprofitable British sports-car maker Group Lotus Plc. in June, filed a claim against the company and its Malaysian parent DRB-Hicom Bhd. for wrongful dismissal.

Bahar, 40, is seeking 6.7 million pounds ($10.6 million) from Lotus for alleged unlawful early termination of his employment, DRB said in a Kuala Lumpur stock exchange filing yesterday. The Malaysian company’s lawyers in the U.K. were notified of the claim on Aug. 23, it said.

“Dany Bahar was dismissed after an investigation into his stewardship of Lotus,” DRB said in the filing, without being specific. “We believe we have acted properly at all times,” it said, adding that DRB and Lotus would “vigorously” oppose and defend the claim.

DRB, controlled by billionaire Syed Mokhtar Al-Bukhary, is tightening its grip over Lotus after inheriting the British company through its purchase of Malaysian taxi-and-sedan maker Proton Holdings Bhd. Bahar was fired from Lotus following a complaint from DRB about unspecified concerns over his conduct, the U.K.-based auto manufacturer said on June 7.

Bahar joined Hethel, U.K.-based Lotus as CEO in 2009 after being recruited from Fiat SpA’s Ferrari, where he was a senior vice president, according to Lotus’s website. Prior to that, the Istanbul-born executive worked at energy drink maker Red Bull GmbH and Fritz Kaiser Group, according to the website.

DRB and Lotus will file counter-claims against him, yesterday’s announcement said. Shares of DRB fell 0.4 percent in Kuala Lumpur as of 10:12 a.m. today. The benchmark FTSE Bursa Malaysia KLCI Index was little-changed.

Lotus, the maker of Elise sports cars, has struggled to compete against Porsche AG and Ferrari in Europe, and has hung on to relevance in the auto industry partly because of its decades-long expertise in designing lightweight frames.

Light Car

The Lotus Elise, at 2,010 pounds (912 kilograms), is the lightest performance car sold in the U.S., according to Santa Monica, California-based Tesla Motors Inc. has relied on Lotus chassis designs since 2008 for its Roadster sports car.

DRB, which in March said it may sell Lotus if it doesn’t meet performance targets, said in May it has decided against selling the British carmaker.

DRB announced a 64 percent drop in first-quarter earnings to 32.6 million ringgit yesterday. This was due to higher finance costs related to its Proton acquisition and continuing losses at its Lotus unit, it said in a separate exchange filing.

In 2010, Bahar spearheaded a five-year turnaround plan for Lotus to increase sales in emerging markets -- especially China -- and introduce five new models, starting with the Esprit at the end of 2013, according to Proton’s annual report for the year ended March 31, 2011. Bahar said in December it could break even by 2014.

Lotus sold 1,985 units during the year ended March 2011, according to Proton’s annual report. That compares with Ferrari, which boosted global deliveries by 9.5 percent to a record 7,195 cars during 2011, led by sales in the U.S. and China.

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