Lotus said to owe suppliers over RM110 million

Lotus said to owe suppliers over RM110 million

According to a report published by British daily The Independent, Lotus owner DRB-Hicom is facing threats of legal action from a number of suppliers over non-payment of debts – said to total £23 million (RM113 million) – and has asked the Inland Revenue to delay tax payments to conserve cashflow.

The report said that DRB-Hicom was unavailable for comment, but sources close to the company said many of the outstanding issues – including payments to suppliers – relate to the previous management. They added that in some cases, the Malaysian company is challenging some of the arrangements with suppliers over previous contracts where there are quality control concerns.

However, they also said DRB-Hicom remains committed to the Hethel plant, its workforce and turning Lotus around into a self-reliant and global brand – DRB was reported to have rejected an offer to take the loss making sportscar maker off its books for £1. A final plan to make Lotus self-sufficient should be ready soon following due diligence work being carried out by consultants.

The British daily stated that according to the company’s internal financial results, which it managed to see, Lotus owes suppliers – which include ARM, Logica and OCS – up to £23 million (RM113 million) at 90 days overdue, and another £7 million (RM34 million) between 30 and 90 days.

“One petition has already been lodged with the company, and several others are outstanding. But the danger is that someone may sue for winding-up,” one person close to the group told the publication. Losses, the paper reports, are shown to be running at £23.6 million (RM116 million) – after exceptional items, interest and tax – for the last five months to August.

Lotus said to owe suppliers over RM110 million

DRB-Hicom acquired Lotus following its takeover earlier this year of Proton, and DRB claims that £100 million (RM492 million) of its money has been invested in Lotus since the takeover.

Following a financial investigation of Lotus, DRB sacked then-chief executive Dany Bahar in June for alleged gross misconduct and appointed British-trained engineer Aslam Farikullah as COO. Bahar, as well as the heads of legal and human resources, are suing DRB for alleged wrongful dismissal and other matters.

The Independent adds that the situation is made all the more delicate because of the way the previous owners had a back-to-back guarantee with the banks based on its cash. Proton had agreed a £270 million loan with a syndicate of six banks to provide a massive expansion programme. Some £200 million (RM984 million) of the loan had been drawn down by the previous management, but a DRB spokesman said the new owners had hoped the rest of the money agreed with Lotus 18 months ago would soon be released.

Production of new Lotus cars has also suffered hiccups. According to the document, current and continued engineering delays to the Exige, its latest model, is now “severely impacting the whole business”, while the new Esprit has either been delayed or cancelled. Production was cancelled for a fortnight a few weeks ago. Ultimately, the paper reports, there are fears that DRB is stripping out some of the engineering technology and that the management still hopes to sell the business on to a Chinese owner.

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Jonathan James Tan

While most dream of the future, Jonathan Tan dreams of the past, although he's never been there. Fantasises much too often about cruising down Treacher Road (Jalan Sultan Ismail) in a Triumph Stag that actually works, and hopes this stint here will snap him back to present reality.

 

Comments

  • blue-traveler on Oct 11, 2012 at 3:02 pm

    Soooo…a possible scenario; last owner, then proton management people, together with Dany B, pocketed somewhere slightly below £200 million, then cabut. Dany might be suing because he feel that money split is not as promise…And DRB, cannot openly end the suit as the names in the name list can be release unless they don’t want to be living in Malaysia anymore…hahaha. good story for a short movie, ay.?

    Like or Dislike: Thumb up 39 Thumb down 3
    • Well, the good thing might be that it’ll bankrupt DRB and they have to sell to someone more capable of developing Proton! YAY!

      Like or Dislike: Thumb up 28 Thumb down 7
      • noname on Oct 11, 2012 at 5:55 pm

        Volkswagen AG =)

        Like or Dislike: Thumb up 8 Thumb down 9
        • what VW? sell to tony fernandez lah. he is good at this kind of thing

          Like or Dislike: Thumb up 2 Thumb down 5
      • flat_tire on Oct 12, 2012 at 4:08 am

        or to some random company from China.. o.O

        Like or Dislike: Thumb up 8 Thumb down 5
      • muthu on Oct 15, 2012 at 3:22 pm

        what if they sell to the condom company so that they can create a better product so that stupid people like you father does’t not have a stupid son like you..=D

        Like or Dislike: Thumb up 1 Thumb down 1
  • Cari fasal on Oct 11, 2012 at 3:30 pm

    yeah a movie thriller of how lotus close shop world wide..
    hurm…
    that is the best solution..

    bye bye lotus..

    make it a history to remember..

    Like or Dislike: Thumb up 27 Thumb down 2
  • And thats why Proton has no money to spend on their local cars.

    and also, they will continue to need protection for their brand.

    everybody will suffer.

    the fact that proton satria in Malaysia cost the same with proton satria in UK or Australia, just shows you that Proton is sucking money from Malaysians.

    please dont buy proton.

    Well-loved. Like or Dislike: Thumb up 74 Thumb down 7
  • macroman on Oct 11, 2012 at 3:50 pm

    i luv lotus handling. No pun intended.

    Like or Dislike: Thumb up 18 Thumb down 8
  • Black Dog on Oct 11, 2012 at 3:56 pm

    When a bunch of proud Malaysians want to stick their hands into the snobbish English management, that’s what happens. It’s not China or India. If the workers don’t like it, they’ll just down their tools.

    Like or Dislike: Thumb up 22 Thumb down 4
  • The purchase of Lotus was a complete waste of money from the beginning. Typical malaysian company….champion at home but useless abroad.

    Well-loved. Like or Dislike: Thumb up 67 Thumb down 8
    • jameslee on Oct 11, 2012 at 5:05 pm

      It is Mahathirs’ way of short cut to success.

      He thinks success can be purchase with money, buy pouring money into many things and choosing a person to lead it based on their religion and race.

      Buying up Lotus doesn’t mean a transfer of technology, it is forbidden by the british government to transfer technology abroad. Proton is nothing more than an investor, not an owner. Just like the Ducati investment and many more.

      If Proton and all the other Malaysian companies want to succeed, they have to hire the best. And by what I mean the best – that is to pay good money for foreigners to come and teach us, not to accquire their bankrupt companies in hope of salvaging technologies that can’t be exported.

      Anyone remember MMChip? Sold by Mitsubishi or Toshiba because at that time it is the smallest chip in the world… Mahathir was thrilled coz the Jap are willing to sell, after 6 months, the Jap annonced a smaller chip. 10 times smaller with RFID, and even cheaper to produced. Malaysia paid RM200 million for that useless chip if I am not mistaken.

      You want technology, you have to learn. Not purchase, it can’t be bought. It can only be accquired via hard work, trial and errors.

      Well-loved. Like or Dislike: Thumb up 92 Thumb down 15
      • there is ‘or’ and bunch of accusations with ‘..if i am not mistaken’. if you are not sure, find the facts first. if not, just talk what you are sure about.

        Like or Dislike: Thumb up 9 Thumb down 28
        • presna on Oct 11, 2012 at 10:45 pm

          by right, if everyone were supposed to talk about things that they’re completely sure about, then there would be nothing to talk about….

          while it may just be hear-say, the only way you can be certain of the authenticity of what you’re saying is only if you were main actor in the scenario, like say in the purchase of the chip tech …..

          but then if you were, would you bother spilling the beans on something like this?

          …. though you gotta give the guy ‘some credit’ for including the “if i am not mistaken” clause…… something most people don’t bother doing….

          Like or Dislike: Thumb up 13 Thumb down 9
        • jameslee on Oct 12, 2012 at 12:24 am

          and I quote from Utusan Online (2004):

          “Recently, we have also acquired the MM chip from a Japanese R&D company, FEC Incorporated. The MM chip is the smallest in the world measuring 0.25 square milimetres.”

          http://www.utusan.com.my/utusan/SpecialCoverage/Belanjawan2004/index.asp?pg=ucapan/speech_main.htm

          and the new world record according to wikipedia – Hitachi holds the record for the smallest RFID chip, at 0.05mm × 0.05mm = 0.0025 sqmm

          Basically we paid for a useless technology, or we just paid for their R&D.

          Like or Dislike: Thumb up 0 Thumb down 0
      • nazri on Oct 12, 2012 at 5:58 pm

        MMChip come from Sanyo :)

        Like or Dislike: Thumb up 0 Thumb down 0
    • tan ah kow on Oct 11, 2012 at 5:31 pm

      It is all Dr M fault. Long ago it is he who got
      DRB to buy the Lotus brand.

      Only he see gold in the Lotus brand.

      Like or Dislike: Thumb up 36 Thumb down 10
      • Now it’s all his fault eh?

        During 1998, it’s him who saw another way of recovering from the economy collapse. Well, he had a good eye i must say. And with Lotus, It’s also a good thing to have the company as ours. It’s the previous management of Lotus that somehow manage things badly. Not Mahathir.

        Just a note: Have you driven a Proton yet? Well I do. A Proton Saga FLX. And honestly, it has better handling than a Vios. And I’m owner of two Altis, one Vios and one saga. I guess Proton does improved in that.

        Like or Dislike: Thumb up 56 Thumb down 58
        • Ashton on Oct 11, 2012 at 8:56 pm

          Gotta agree with you. I’m not a big Proton supporter, but for the new Saga money, it’s worth it.

          Like or Dislike: Thumb up 28 Thumb down 15
          • mercury on Oct 12, 2012 at 9:30 am

            ARE YOU sure it’s worth it? (with all the bloated inflated tax imposed on all foreign cars). it’s better to think b4 you say smtg

            Like or Dislike: Thumb up 19 Thumb down 12
          • Ashton on Oct 13, 2012 at 6:42 pm

            mercury, my opinion is based on the options available in malaysia. for the price of a saga, the next alternative is the viva, underpinned by daihatsu technology, nothing wrong with that but i’ll still choose saga over viva for it’s size.

            Like or Dislike: Thumb up 0 Thumb down 0
        • If that is the case, i guess it is time for the gov to lower the tax since proton can produce equally or better cars than japs.

          Funny, how come Proton can’t even penetrate a single foreign market with their better cars? why?

          Like or Dislike: Thumb up 27 Thumb down 3
        • comrade on Oct 12, 2012 at 9:09 am

          not everybody can make a correct decision all the time…sometimes you win sometimes you lose… but make sure got backup plan..

          Like or Dislike: Thumb up 0 Thumb down 0
        • have we really recovered from the AFC 97-98?
          are we really better and stronger?
          whats the point of good handling when the fit and finish and the engine of proton suck?
          i know people who have a new proton saga, they say nothing to be proud of, what did you expect from a socalled “national car”.
          Lotus has been nothing but a financial blackhole since day 1.

          Like or Dislike: Thumb up 0 Thumb down 0
    • takNakP1 on Oct 11, 2012 at 5:54 pm

      simple common sense… a company won’t sell if is making $$$, then if its technology is really that great, i don’t think Proton got a chance, unless it was bought at above reasonable market value… where all other player doesn’t think it is worth.

      Like or Dislike: Thumb up 7 Thumb down 1
  • takNakP1 on Oct 11, 2012 at 5:13 pm

    now the offer will be 0.1 pound to take over.
    cannot handle just let go lah. no one will blame you (DRB Hicom). let go Proton also lah before it drag you down together.

    Like or Dislike: Thumb up 12 Thumb down 6
  • Steve on Oct 11, 2012 at 5:23 pm

    Malaysia Macam Macam boleh!!!

    Like or Dislike: Thumb up 22 Thumb down 2
  • matlimmutu on Oct 11, 2012 at 6:15 pm

    evil britons

    Like or Dislike: Thumb up 7 Thumb down 10
    • if u saw evil and still you wanted to buy then shame on you! if not, due diligence should have warned you off.

      Like or Dislike: Thumb up 0 Thumb down 0
  • KillBox1Alpha on Oct 11, 2012 at 6:26 pm

    Makes a good novel

    Like or Dislike: Thumb up 0 Thumb down 0
  • jjchew on Oct 11, 2012 at 7:18 pm

    Good example of a due diligence exercise not properly done.

    Like or Dislike: Thumb up 9 Thumb down 1
  • Bought MV-August cost millions, sold $1. Bought Lotus cost millions, to be sold at $1 again?

    Like or Dislike: Thumb up 27 Thumb down 2
  • DArkerMarker on Oct 11, 2012 at 8:29 pm

    sell this juicy story to hollywood. Spice up the story. make it a block buster maybe.

    MAybe DRB can make a few millions bucks from selling the movie. Can use the money to pay the expenses of hiring lawyer…hahaha

    Like or Dislike: Thumb up 0 Thumb down 0
    • presna on Oct 11, 2012 at 10:51 pm

      hollywood? beh, support asian style, maybe bollywood could do better, imagine a dance scene involving the big guns from DRB, Proton and lotus dancing around a tree….. or meadow…. or something…. heck may be Danny Bahar might be interested in a role in that movie…..
      p.s. seriously…. a movie on this does seem kinda plausible sorta idea…. no???

      Like or Dislike: Thumb up 0 Thumb down 0
  • Shazz on Oct 11, 2012 at 8:33 pm

    It is better to stay positive, avoid negative comments guys unless you have constructive ideas i.e positive ending. Comment negatively won’t get us anywhere

    Like or Dislike: Thumb up 9 Thumb down 27
    • lopui on Oct 11, 2012 at 9:12 pm

      positive? for what, who will adopt that suggestion
      In the most ppl Syok sendiri

      Like or Dislike: Thumb up 15 Thumb down 5
  • Sell sell sell. Yup, mentality of a loser aka quitter. Didnt even bother to try out. Thats y better to be a keyboard hero than actually doing it.

    Like or Dislike: Thumb up 13 Thumb down 7
  • ahmadfaris93 on Oct 11, 2012 at 8:58 pm

    Something fishy about Danny Bahar. There must be a solid reason for Danny Bahar to be sacked or something. Now this.

    Like or Dislike: Thumb up 9 Thumb down 2
  • Continuing Pumping hundreds of millions of ringgit into a small niche car player, all in the name of pride, and incompetent people in charge, what a good waste of money

    Like or Dislike: Thumb up 17 Thumb down 2
    • Henry on Oct 11, 2012 at 11:15 pm

      Pride alone is not enough to keep the company afloat. Lotus just can’t sell enough cars, period. Every car they sell loses money. The financial bleeding isn’t going to stop anytime soon. Not long ago Proton already guaranteed a GBP24 million to Lotus. Duit itu sudah habis kah?

      People here who wants to read positive comments about Lotus should chip in the money to help pay the debt or better still buy the company and turn it around, say, in a hundred years’ time.

      Like or Dislike: Thumb up 14 Thumb down 1
  • Henry on Oct 11, 2012 at 9:29 pm

    Not to worry. Father have plenty of dough. Another GBP24 million will be on the way very soon.

    Like or Dislike: Thumb up 8 Thumb down 2
  • Expatriate VN on Oct 11, 2012 at 9:51 pm

    Buy, buy, buy ……..

    I want to buy Lotus for GBP 1.00 and buy Jaguh Kampung No. 2 at RM 1.00!

    Waiting for that cronies company volcano fire auction!!!!!!!

    Like or Dislike: Thumb up 16 Thumb down 6
  • Village Boy on Oct 11, 2012 at 11:03 pm

    Yeah, just sell it away instead of struggling thru.

    What is the point of holding it until now? For the pride of Jaguh? For letting the world know of how capable a Jaguh is?

    Eventually, it’s just another failure & rakyat got to bear the losses!

    Like or Dislike: Thumb up 16 Thumb down 2
    • Expatriate VN on Oct 12, 2012 at 9:02 am

      Totally agreed with you. I am waiting to buy at GBP 1.00 or RM 1.00 or a combination of it!!!!

      Like or Dislike: Thumb up 6 Thumb down 2
      • berombon on Oct 12, 2012 at 4:35 pm

        podahhhh…la you want to buy it at the price..mana you mampu. cakap banyak kat sini boleh la….

        err, anak aku pon ada cakap dia boleh pecah tabung beli compani tu…

        Like or Dislike: Thumb up 1 Thumb down 4
  • Brader_lotus on Oct 11, 2012 at 11:58 pm

    its really ironic when proton key establishment factor was to minimize currency outflow through local production of national car but here on the other hand we see money are flowing like river just for the sake of pride owning a British Sport car manufacturer. its even funny to see there some people here who actually suppork DRB.

    Like or Dislike: Thumb up 0 Thumb down 0
  • seilo on Oct 12, 2012 at 12:12 am

    Proton? change 3 times power steering. get rid off thei

    Like or Dislike: Thumb up 4 Thumb down 2
  • mohd rafidee on Oct 12, 2012 at 2:44 am

    All I know is that the reason why DRB was chosen to
    take Proton private was to ensure that the public
    was shielded from the mess created by their previous
    succesors ie TM,DSZ and DS Nadzmi.
    The 1 bil cash in Proton b4 they were taken private
    has been plundered. All the govt protection and subsidies as well as the support given to Proton for the past 25 years has gone down the drain.
    That is why we see Proton
    at status quo, directionless and clueless after
    DRB came into the picture.
    Proton cybertroopers all caught with their pants down cos they pretend to be shocked to this
    embarrasing news. DRB is asset stripping Proton apart and here everyone thought they were the guardian angles instead.

    Like or Dislike: Thumb up 14 Thumb down 1
    • Do you remember one unprofitable Korean electrical appliance company called Lucky Goldstar? Well, they re-invented themselves and today we have the world renown LG!

      Like or Dislike: Thumb up 3 Thumb down 1
  • June Bug on Oct 12, 2012 at 7:54 am

    With all this crap,the Government wants to fund proton sumore?wtf.Let Proton die,solves a lot of issues.

    Like or Dislike: Thumb up 16 Thumb down 2
  • vee-oh on Oct 12, 2012 at 9:05 am

    just let go Lotus…not capable of anything other than glued up small sport car..

    Like or Dislike: Thumb up 0 Thumb down 0
  • v-power on Oct 12, 2012 at 11:45 am

    I will up the money to DRB to £1.50 pence to take over Lotus…then sell it to Chinese owners, or other willing parties for £10 million…hahah

    Seriously DRB…just let Lotus go already…no point having the loss-making brand around while everywhere around you things are falling faster than a deck of cards…The British will hentam us kaw-kaw if their iconic brand meets an untimely death, all because of DRB’s appalling mismanagement and lack of any business direction…so…jangan malukan Malaysia ya…

    Like or Dislike: Thumb up 5 Thumb down 1
  • ae101 on Oct 12, 2012 at 12:06 pm

    sell the damn lotus la. waste of tax payer money. how much it really contribute proton? lotus handling? my ass ada la!!! if proton car consist of low grade material, how you expect it to be good handling even if lotus involve? if proton want to survive, concentrate on develop everyday car just like how nissan, honda, and toyota started. world is very fair. you pay what you get. wish the supplier sue them kaw kaw.

    Like or Dislike: Thumb up 14 Thumb down 2
  • Cheah Tat Cheong on Oct 12, 2012 at 12:40 pm

    What a mess! Another one of Mahathir’s many lofty projects which has come back to haunt us. What do you do, DRB? Choice is either dump it now and lose less money, or dump later after squandering yet more millions you don’t have.

    Like or Dislike: Thumb up 0 Thumb down 0
  • Sentinel Prime on Oct 12, 2012 at 1:07 pm

    Tutup jer la kedai lembab setelah Proton telah hancur brand itu serta car company & Team lotus tulen F1 at least tak payah bayar hutang lagi. Biasalah semuanya hancur musnah bawah tangan Proton, lagi best ikut trend tradisi lama Proton jual saja lah Rm 1 atau 1 Euro kepada China atau India yang kaya raya. Tengok jer lah Land rover & Jaguar under Indian Tata dan Volvo under China geely. Saab pun sekarang jatuh kat tangan China juga melalui Hong kong company.

    Like or Dislike: Thumb up 5 Thumb down 1
  • All things in life start small. Everyone starts as a baby then moving on the become a child and later adult. I believe Proton started well. It starts to hit the bumps when she tried to buy Augusta and Lotus
    to make a detour to success. Dr. M will attest that any good doctor needs many years of training!!!

    Like or Dislike: Thumb up 0 Thumb down 0
    • berombon on Oct 12, 2012 at 4:42 pm

      Did they really wanted to buy Agusta?? or were they ‘forced’to buy Agusta. If I remember it correctly, Proton was sued by Alfa for copying their logo (remember Perdana’s logo? It used to be called the Alfadana. Then suddenly everything went quiet and the next thing we know was that Agusta is already proton owned.

      Maybe this is all wrong but feel free to discuss it.

      Like or Dislike: Thumb up 0 Thumb down 0
  • jona thanle eduma ss on Oct 12, 2012 at 4:35 pm

    Lotus is only for ‘Cari Nama saja’ and play thing of auto big wigs in Malaysia…in truth it really
    doesn’t benefit the majority man in the street…

    Like or Dislike: Thumb up 2 Thumb down 1
  • RedBeanBun on Oct 12, 2012 at 6:14 pm

    hahahaha! another failed business run by Gov/Cronies, its expected and how can a Lotus selling virtually un notice quantity of car survive?

    its all those BS Msia proud to pour all the $$ into this Protong/Lotus BS.

    Like or Dislike: Thumb up 0 Thumb down 0
  • On one hand they encourage us to drive aggressively with ” lotus handling” tag, than they catch u with the newly hidden AES…only in bolehland

    Like or Dislike: Thumb up 0 Thumb down 0
  • Pumpkins on Oct 13, 2012 at 9:43 am

    Tutup lubang, Gali lubang…RM1 Billion loan the banks should catch the Grandfather faster…Or Protong can apply new loan again to cover old loan lah…Tutup lubang, Gali lubang…HA HA HA

    Like or Dislike: Thumb up 0 Thumb down 0
  • vee-oh on Oct 13, 2012 at 10:50 am

    Proton should have bought Volvo than this shitty Lotus..Lotus is zero, no commercial value, just talk big bout handling bla bla bla but at no profitable level at all..you make car to make profit in the end, not just for charity..both stupid Lotus & Proton..just go bankrupt..just stop this unneccessary memory of this Colin Chapman and move forward..if talk bout handling, woi Renault Megane also handles la, BMW also handles, heck any Honda Type R also handles la

    Like or Dislike: Thumb up 11 Thumb down 1
  • Doc Brown on Oct 15, 2012 at 10:36 am

    Proton should actually use Lotus’ services and learn from working together with them, not wasting all it’s money working with LG and Frazer Nash. But then none of Proton senior management would get rich!!

    Like or Dislike: Thumb up 0 Thumb down 0
  • dumbMalaysian on Oct 15, 2012 at 6:54 pm

    So many smart people here, so many smart coments made. Yet no one will actually take on the responsibility if it were given the job. I wonder why? I’d like to see ONE person from this website actually join either Proton or Lotus and turn them around, you guys ‘obvioulsy’ know what you’re talking about..

    Like or Dislike: Thumb up 0 Thumb down 0
  • 14yrs ago, a fruit company almost had to file into chapter 9. (Even worse than Proton). Then came a guy with a vision + action. He first made everyone in the company agree their products were rubbish. After that changed the company’s culture from follower to innovator. Pushed a handful of brilliant life-changing products into the world. Today it’s the largest & most profitable company in the world. – Regardless of Lotus, Agusta or buying up Alam Flora dump trucks, Proton needs to first CHANGE its CULTURE!

    Like or Dislike: Thumb up 0 Thumb down 0
  • Dear DRB-HICOM:

    On your own market which you know about also you cant turn around PROTON, what more you want to turn around LOTUS in a market you know nothing about? If you go under, dont use rakyats money to bail any of your failed projects!

    Like or Dislike: Thumb up 0 Thumb down 0
 

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