Axed Bahar sues Lotus for $10.3 million

SACKED former Lotus chief executive officer Dany Bahar has this week filed a claim for wrongful dismissal against the UK sports car manufacturer and its Malaysian parent company DRB-Hicom.

Mr Bahar, who was fired in early June two weeks after being forced to stand down after an investigation into a complaint about his behaviour, will seek £6.7 million ($A10.3 million) in damages plus all legal costs.

DRB-Hicom said in a Kuala Lumpur stock exchange filing this week that it would “vigorously oppose and/or defend the claim” lodged by Mr Bahar, and would consider filing a counter-suit.

“Dany Bahar was dismissed after an investigation into his stewardship of Lotus,” it said. “We believe we have acted properly at all times.”

British media reports in June suggested that the investigation leading to Mr Bahar’s dismissal involved expense claims relating to the former CEO’s personal homes, and that his employer had confiscated his mobile phone and laptop computer as part of its inquiry.

Mr Bahar, a 40-year-old Swiss national born in Turkey, joined Lotus as CEO in 2009 after being recruited from Ferrari SpA, where he had been vice-president for sales, marketing and communications since 2007, having previously worked for the Sauber and Red Bull Formula One teams.

The dismissal of Mr Bahar came in the midst of a five-year turnaround plan for unprofitable Lotus that involved increasing sales in emerging markets such as China and launching five new models, starting with a new Esprit at the end of 2013.

Five new concept cars were presented at the Paris motor show in 2010.

He was also responsible for the current sponsorship of the former Renault F1 team – which led to a legal battle with the existing Lotus team that subsequently became Caterham – and a US Indycar program.

Mr Bahar told Automotive News Europe in December that Lotus could break even by 2014.

According to Proton's annual report in 2011, Lotus sold 1,985 units during the financial year ended March 2011, compared with Ferrari’s tally of 7,195 cars during 2011, led by demand in the United States and China.

DRB-Hicom, which in addition to owning both Proton and Lotus also has joint-venture deals with car-makers like Honda, Isuzu and Suzuki to manufacture vehicles for the Malaysian market, recorded a 119 per cent jump in revenue for the first quarter of the 2012 financial year ended June 30.

The conglomerate, which bought the Malaysian government’s 42.7 per cent stake in Proton/Lotus in January this year, chalked much of this growth up to its acquisition of the domestic car-maker.

Managing director Dato’ Sri Haji Mohd Khamil Jamil called the impact of Proton’s acquisition on the group’s bottom line as “transient” in June this year.