Lotus CEO Is Suspended After DRB Complaint Over Conduct
Group Lotus Plc, the unprofitable luxury sports-car maker, suspended Chief Executive Officer Dany Bahar after a complaint from Malaysian parent DRB-Hicom Bhd. (DRB) about unspecified concerns over his conduct.
The temporary suspension is meant to facilitate an investigation into the complaint, according to a statement from Proton Holdings Bhd. today. Bahar, formerly a Ferrari executive, didn’t immediately respond to an e-mail seeking comment.
Billionaire Syed Mokhtar Al-Bukhary’s DRB is shaking up management at Lotus, which hasn’t made a profit in at least 15 years, according to comments from Bahar in an interview in December, after inheriting control of the British carmaker through its purchase of Malaysian taxi-and-sedan maker Proton this year. Proton also said today that it is not selling Lotus.
“Dany Bahar was the key player behind the turnaround plan for Lotus,” said Alexander Chia, an analyst at RHB Capital Bhd. (RHBC), in a telephone interview today. “If he is cleared, it would indicate that the management is happy to continue bankrolling Lotus. If he ends up out, there will be a lot of uncertainty on where Lotus goes from here.”
Bahar, 40, joined Hethel, U.K.-based Lotus as CEO in 2009 from Fiat SpA’s Ferrari, where he was a senior vice president, according to Lotus’s website. Prior to that, the Istanbul, Turkey-born executive worked at energy drink maker Red Bull GmbH and Fritz Kaiser Group, according to the website.
The Telegraph reported late last week that Bahar had been suspended by Lotus’s Malaysian owners.
Lukman Ibrahim, Mohd Khalid Yusof and Aslam Farikullah from Lotus’s parent companies will be in charge of day-to-day management at Lotus during the suspension, according to the statement.
According to the December interview with Bahar, Lotus hasn’t generated any profit since it was acquired by Proton in 1996 as the maker of the Elise sports car struggled to compete against Porsche AG and Ferrari in Europe. Still, the carmaker hung on to relevance in the auto industry partly because of its decades-long expertise in designing lightweight frames.
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 Edmunds.com. In comparison, the 2012 Porsche Cayman weighs 2,932 pounds, while the Mazda MX-5 Miata sports convertible tips the scales at 2,480 pounds, according to the website. Tesla Motors Inc. (TSLA) has relied on Lotus chassis designs since 2008 for its Roadster sports car.
DRB-Hicom hired consultant KPMG to evaluate Lotus, a person familiar with the matter said last month. DRB said in March that it may sell Lotus if it doesn’t meet performance targets and a decision will be made after a thorough evaluation. Other options include changing the management at Lotus or its business approach, Managing Director Mohd Khamil Jamil said then.
As part of a five-year turnaround plan that began 2010, Lotus plans 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 that Lotus could break even by 2014.
The carmaker sold 1,985 units for the year ended March 31, 2011 according to the annual report. That compares with Ferrari, which boosted global deliveries by 9.5 percent to a record 7,195 cars last year, led by sales in the U.S. and China.
DRB-Hicom rose 0.8 percent to 2.43 ringgit at the close in Kuala Lumpur trading. The FTSE Bursa Malaysia KLCI Index gained 0.3 percent.
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