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China may buy Lotus brand

Ministers pledged to ‘keep Lotus in Britain.’

In a repeat of the MG Rover fiasco, they fear up to 1,400 UK jobs could be lost and the 60-year-old business exported lock, stock and barrel to the communist People’s Republic.

Lotus was sold 16 years ago to Malaysian car-maker Proton which developed and nurtured the firm.

This year, it was on the brink of a massive £500million expansion when a new and bigger set of Malaysian owners – the industrial conglomerate DRB-Hicom – took it over.

This business, however, is said to have little interest in making Lotus cars and has appointed City firm KPMG to find a potential Chinese buyer, Parliament has been told.

DRB-Hicom insists no decision has been taken on Lotus’s future. But it will not rule out a sell-off.

Lotus chief executive Dany Bahar, on a pay and bonus package worth £1.2million, had his employment extended in December, just a month before the Malaysian deal was revealed.

It now includes a controversial bonus clause worth millions of pounds in the event of a sell-off which MPs were told means he is ‘incentivised to sell Lotus’.

Conservative MP for South Norfolk Richard Bacon told Parliament up to 1,400 British jobs are at risk if the UK factory in Hethel, Norfolk, is dismantled and production moved to the Far East.

Ministers pledged to ‘keep Lotus in Britain’ when Mr Bacon was granted a Commons’ debate on the issue late on Tuesday. Mr Bacon said: ‘The fact that KPMG has been appointed with a mandate to sell Group Lotus to the Chinese is not an encouraging sign.’

Business Secretary Vince Cable raised concerns with Mr Bahar on Tuesday – less than a day after the car boss’s return from Beijing where he unveiled a new model specifically for China. The company has struggled to make a profit in recent years and it recorded pre-tax losses of £26.1million last year.

Mr Bacon said industry experts have warned him of a ‘worst case scenario’ in which Group Lotus would be put into administration, allowing a Chinese buyer to acquire it cheaply – as happened when MG Rover collapsed in 2005, with the loss of 6,000 jobs. A rump of production was eventually resumed at the Longbridge plant two years later.

Lotus strenuously denied suggestions that a ‘fire sale’ strategy was being contemplated, or that it could be put into administration, but bosses have not ruled out selling the firm.

Group Lotus has ambitious five-year expansion plan for the Hethel plant, which would create 1,000 new jobs, and the Government rubber-stamped a £10million taxpayer-funded grant last year.

But that regional growth fund grant is now on hold while Lotus’s new Malaysian owner decides its future.

Prospective bidders are likely to include China Youngman, which has been Lotus’s importer in China for the last five year.

Business Minister Mark Prisk said Lotus ‘must remain in Britain’, adding: ‘Ministers at the very highest level are taking this matter very seriously. We are working to make sure the new owners understand Norfolk is the home of Lotus.’

The Government remains ready to press ahead with its £10million grant to Lotus – but only if the expansion plans for the UK go ahead.

Norfolk Council leader Derrick Murphy said: ‘It is important we continue to press the case for the company as so many livelihoods depend on Lotus being based here in Norfolk.’

Lotus said: ‘Dany Bahar remains totally committed to Lotus. His over-riding priority is securing the future of the company and protecting its employees.’


Lotus was founded in 1952 by car engineer Colin Chapman with the help of a £50 loan from his wife Hazel

His initials still form part of the marque’s badge

The Lotus name is said to come from Chapman’s nickname for his wife

Most models begin with an E – a tradition started with the Lotus Eleven. Chapman liked the way the letter sounded

He died of a heart attack aged 54 in 1982.