In a significant move to protect British industry, the UK government has formally blocked the proposed sale of a controlling stake in the legendary Norfolk-based sports car manufacturer, Lotus Cars, to a Chinese state-owned enterprise.
The decision, made under the powerful National Security and Investment Act 2021, halts a deal that would have seen the Chinese conglomerate transfer its majority shareholding to another state-controlled entity. Business Secretary Jonathan Reynolds has issued a final order preventing the transaction, effectively safeguarding the future of the iconic British brand.
A Prestigious Brand Under Scrutiny
Lotus Cars, headquartered in Hethel, Norfolk, is a jewel in the crown of British automotive engineering, renowned for its lightweight sports cars and engineering consultancy. Currently, China's Geely holds a 51% stake, with Malaysian partner Etika Automotive owning the remaining 49%.
The proposed internal restructuring within the Chinese corporate structure raised immediate red flags in Whitehall. The government's intervention underscores growing apprehension over foreign state ownership of critical UK assets and advanced technology.
The Trump Connection and Broader Concerns
Complicating the matter further is the involvement of the former Trump administration. During his presidency, Donald Trump's commerce secretary, Wilbur Ross, sat on the board of the very Chinese company attempting the stake transfer. This high-profile connection likely intensified scrutiny of the deal's implications for UK and even European security.
The government's assessment concluded that the change in ownership structure could facilitate unwanted access to sensitive technological capabilities, potentially undermining both UK and European security interests.
What This Means for Lotus and the UK
This decisive action signals the UK's increasingly firm stance on protecting its strategic assets from foreign state influence. For Lotus, operations will continue under its current ownership structure. The government's order specifically prevents the Chinese parent company from completing the internal transfer of its UK shares.
This case marks a pivotal moment, demonstrating the government's willingness to use its enhanced powers to scrutinise and block deals that threaten national security, even when they involve internal corporate restructuring rather than a traditional sale to an external buyer.
