Proton Holdings Bhd has claimed that the 1Malaysia Racing Team Sdn Bhd (1MRT) asked for between £22 million to £37 million (RM108 million-RM182 million) to settle the dispute over the use of the Lotus name in Formula One racing.
According to Proton, the proposed settlement was made in November last year, and included the purchase of the Team Lotus name (purportedly for £5 million) and other indirect costs that 1MRT had incurred such as development of a new brand, loss of income from produced merchandise and loss of sponsorship.
However, Proton said, it agreed to consider paying only for the Team Lotus name subject to due diligence being conducted and not be made responsible for the indirect costs which could have been avoided by 1MRT.
It made the statement in response to a recent inverview by Datuk Seri Tony Fernandes with a foreign wire service recently.
Aviation tycoon Fernandes had stated that he had rejected a £6 million offer to settle the Lotus naming dispute.
"Our proposed settlement sum was to settle only the purchase price, allegedly £5 million for the 'Team Lotus' name, subject to due diligence and confirmation from 1MRT and other related parties, including Team Lotus Ventures and David Hunt.
"Once the settlement was agreed to by both parties, the 'Team Lotus' name would unequivocally be vested with Group Lotus," said Proton.
Fernandes and two other Malaysian associates bought the rights to use the Team Lotus name from David Hunt, brother of the late British 1976 world champion,James Hunt.
Following their dispute, the coming 2011 Formula One season faced the prospect of having two teams with the Lotus name, with Lotus Renault GP sponsored by a subsidiary of Proton, Group Lotus, and Fernandes' Team Lotus.
Proton said from its perspective, the setlement was fair as 1MRT could have continued using the "Lotus Racing" name and not incur additional charges allegedly in excess of £30 million for the establishment of a new team.
Proton said Group Lotus and it cannot be made liable for 1MRT's commercial misadventure.
Proton also said both Group Lotus and it are open for an out-of-court settlement but the proposal by Fernandes and 1MRT was unreasonable and unjustified.
"For all intent and purposes, 1MRT cannot now demand for us to compensate them for a problem, which they got themselves into.
"1MRT entered into a relationship with Team Lotus Ventures with full prior knowledge that Group Lotus was already in a long-standing legal dispute with Team Lotus Ventures," it explained.
The licensing agreement clearly stipulated that 1MRT could neither associate itself with Lotus nor use the "Lotus" name, once the agreement was terminated, it said.
1MRT could have easily remedied the breaches if it was due to some merchandise as suggested by Fernandes and then, continued to use the "Lotus Racing" name for the 2011 F1 season, it added.
"Group Lotus and Proton have always held the view that this matter should be resolved as soon as possible in the interest of Formula 1 and the fans. Thus, we remain open to reasonable and justified proposals," it said.
