Proton MD says no plans yet to sell Lotus as rumours hit morale

By Clara Chooi

February 13, 2012

KUALA LUMPUR, Feb 13 — Proton has denied making any firm decision on selling British sports car icon Lotus, the Financial Times reported today.

Proton managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir gave his assurance to the influential financial daily that the national carmaker remains committed to Lotus and was not about to get “cold feet and suddenly stop everything”.

“As management today, our plan as Proton and Lotus is to continue the business plan based on what we did before, unless the new shareholder comes in and tells us what to do next.

“So despite what you hear – rumours based on management disposing this or that – no decision has been made,” Syed Zainal Abidin was reported as saying.

He was responding to rumours of the sale, which the Financial Times said has hit morale at Lotus, its relationships with suppliers and sales.

The rumours, added the daily, were fuelled following Khazanah Nasional Berhad’s sale of its 42.7 per cent stake in Proton to tycoon Tan Sri Syed Mokhtar Al-Bukhary’s DRB-Hicom Berhad last month.

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.

But despite the bleak numbers, Syed insisted to the financial daily that Proton plans to stay the course for Lotus.

“It’s something that we started the journey (on), and something we’d like to stick (to). We have owned the business for 13 years ... I think we want to keep it,” he was quoted as saying.

He also suggested that the sale rumours could have originated from potential investors whose sights were set on buying Lotus.

“There might be some interested party who’s out there, for a long time since before this takeover. But why they’re stirring the pot, I don’t know,” he said.

Citing a Reuters report, the Financial Times pointed out that Genii Capital, which owns the Lotus Formula One motor-racing team, had recently voiced its interest in buying Lotus.

But, Syed Zainal Abidin said no such sale has been discussed.

Lotus’s chief executive Dany Bahar, added Financial Times, has also denied reports that he has been seeking funding for a management buyout of the carmaker.

Despite their repeated denials however, the Financial Times noted that the sale rumours may yet come true.

The daily noted that despite Lotus’s respected name among car enthusiasts and racing circles, it sold only about 2,000 cars last year and “earned more by consulting for other carmakers than it did selling its own cars”.

“It has had a series of chief executives and owners since it was founded in 1948, but has made a profit for Proton in just one year since the Malaysian group bought it in 1996,” the daily reported.

But the Financial Times also noted the flurry of activity at Lotus’ expanding site in Hethel, Norfolk, which it says has “the feel of a work in progress”.