Thursday June 21, 2012
Ex-CEO of Lotus sues DRB-Hicom
PETALING JAYA: Dany Bahar, the flamboyant and allegedly free-spending former chief executive officer of Group Lotus plc, has reportedly decided to sue DRB-Hicom Bhd, the ultimate owner of Lotus, for wrongful termination.
According to Swiss newspaper Bilanz, Bahar filed the suit in London's High Court.
DRB-Hicom had acquired a controlling stake in Proton Holdings Bhd early this year. Proton has owned Lotus since 1996. Last month, DRB-Hicom had temporarily suspended Bahar to facilitate an investigation into a complaint about his conduct and subsequently terminated him.
Bahar's legal suit comes amid reports that he had misused company money to renovate several properties that he owned, as well as to pay for private aircraft.
According to some UK news reports, Bahar was paid a guaranteed annual package of at least £1.2mil (RM6mil). Bahar assumed the position as chief executive in 2009 after he was roped in from Fiat SpA's Ferrari.
DRB-Hicom declined to comment for this article.
Details of Bahar's dismissal by DRH-Hicom are still unclear.
“The decision was made by the board of Group Lotus plc following the results of an investigation into a complaint made against him by the company's penultimate holding company, DRB-Hicom,” DRB-Hicom said in a statement two weeks ago.
The company also announced the appointment of Aslam Farikullah as its chief operating officer. Earliear, DRB-Hicom has appointed Ernst & Young to carry out separate evaluation on Lotus and its management team and DRB-Hicom decided to act on the initial findings by Ernst & Young and allegations of possible irregularities.
Proton acquired a controlling stake in the Norwich-based Lotus back in 1996 from liquidators of Bugatti Automobili SpA with the goal of tapping its high-tech automotive engineering capabilities.
However, many would argue today that Lotus is more of a liability than an asset for Proton, although the national carmaker will argue otherwise.
In late 2010, Proton revealed that it had committed to turn around Lotus with a five-year business transformation plan that would potentially cost up to RM2.37bil a feat that has since been a drag on the company's earnings.
According to reports, under Bahar's stewardship, Lotus has been bleeding red ink, putting its parent Proton under tremendous strain.
Proton has not made any profit from the British unit over the past 15 years, which has been struggling to compete against other sportscar makers such as Porsche AG and Ferrari in Europe.