SVD.se Playing Chicken With NEVS and Mahindra

SVD.se has a rather explosive article in its online newspaper today. Pingu raised it in comments and I’ve tracked it down online. Even when reading it via Google Translate, you can tell that this one’s got BIG written all over it.

A tangent, if I may….

It’d be nice if someone’s reputation was completely trashed as a result of this story. It’d be nice if they were exposed, hung out to dry and rendered unable to work in their chosen field of employment ever again.

Why?

Because someone’s lying here. Either someone at NEVS is playing fast and loose with the truth – which has massive ramifications – or one (or more) of the journalists at SVD is treading on extremely thin ice. Regardless of who is in the wrong, neither of them should be lying as part of their job – if they’re doing their job right.

/tangent

The story goes like this….. (according to SVD)

SVD claim that Mahindra effectively pulled out of negotiations in November last year after Saab AB demanded a fee for use of the Saab name. Mahindra were reportedly unprepared for this and it didn’t suit their business case, so they withdrew from negotiations.

Despite withdrawing, Mahindra was happy to sign a letter of intent, which effectively gave NEVS their second reconstruction period. You might remember that they were supposed to do due-diligence work in December and if they were happy, they’d fund the continuing reconstruction work through January and February.

SVD believes that whole scenario was a ruse designed to get NEVS through a second reconstruction period, and agreed to by Mahindra.

The consequences are huge if this story is true. The consequences ought to be huge for SVD if the story is false (and as Pingu points out, it’s very interesting that such an important story doesn’t have a writer’s byline attached to it).

If this story is true, NEVS must stand accused of having lied to its creditors and lied to the court on more than one occasion. NEVS stand accused of lying about the state of negotiations and prospects for a successful exit from reconstruction. And NEVS would stand accused of lying about this not once, but systematically for a number of months.

Note: NEVS was granted a further 3-months of reconstruction time earlier this week, so the alleged lie continues (if that’s what it is – read on).

It’s one thing to give half-truths to the press in the name of media management. That’s breakfast, lunch and dinner for a company press officer. It’s another thing all together to systematically lie to your creditors and the courts in a bankruptcy procedure. That’s well past the point of no return.

If this story is true, Mahindra has been complicit in these lies. I’m not sure what burden they might bear under Swedish law for this type of behaviour but let’s just say they wouldn’t be on many people’s Christmas card lists.

Someone’s head has to roll for this. Either someone at NEVS will be reduced to pumping gas at a station out in the woods or an unnamed journalist ought to investigate a career flipping burgers.

The form guide suggests it should be the journalist. The Swedish press loves a good beat-up and there’s been no bigger target than Saab Automobile over the last 6 years.

A few weeks ago, SVD wrote that there were no ongoing talks between Saab AB and a foreign carmaker in relation to use of the Saab brand name. SVD gave the impression that no continuous talks meant that the deal had fallen through and was off the table.

Saabtala spoke with Saab AB’s press officer and got more information, which cast SVD’s article in a dubious light. Saabtala was told that “There are no ongoing discussions between with Us (SAAB AB) NEVS or a new majority owner. There has not been for some months now. However that does No rule out that the discussion we have had was fruitful or that a contact is being kept between us and the proposed new majority owner of NEVS”.

It’s not a confirmation that everything’s A-OK, that’s for sure. But it’s far from the disaster that SVD painted it to be.

I’d also like to point out my own chat with the gypsies, which yielded that the buyer(s) currently in talks for the purchase of Saab is/are the same buyer(s) that have been in play all along. If it was Mahindra as far back as August, then it’s still Mahindra now.

So this week, with another reconstruction deadline looming (Saab has a creditors meeting coming up on March 23 to formally agree on debt reduction) SVD seem to be timing stories to crank up the pressure on NEVS and Saab AB.

This story’s a big one, for the reasons outlined above. Someone’s lying to someone and that someone ought never be in a position to lie about something important ever again.

It’ll be interesting to see who that is. That’s for sure.

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25 Comments

  1. To answer the question, look at the situation and try to deduce which party has the most to gain by “lying”, then weigh in with, which party has the least to loose by lying.

    It has already been determined that one party is not telling the truth.

  2. It is like a bad soap opera running for 4 years now and just doesn’t want to end. Saab is fubar and GM should have shut it down in 2011. But it still is a bit entertaining, even though all brand dignity is mostly gone.

  3. Oh my…..

    Defamation, Slander……. Surely it won;’t be long before the solicitors start issuing writs….!

  4. “doesn’t have a writer’s byline attached to it” Yes it has, Jonas Fröberg (12 mars 2015 klockan 06.07 i avdelning Näringsliv av Jonas Fröberg)

    1. Thankyou. I couldn’t see it at the top of the article.

      Note to self: scroll down way below where the article actually finishes next time 🙂

      1. I looked for a name (Fröbergs name) on tha page several times this morning, and I’m pretty sure there wasn’t any at that time. Could have been some ad blocker playing games with some web content.

  5. I may have to make some of you disappointed. Journalist in Sweden can write almost any speculative BS they want without risking anything. “We have our sources that we can’t reveal”, “At the time it seem to be legit information”, “We made decision this was something the public needed to know about”, etc. Even if they ruined someones personal life with lies and slander, they still hardly say “sorry”.

    I have tried to go through what NEVS has actually been saying to the media during all this…

    In May/June last year after production stopped, they said it was better to stop so that accountants could get a clearer view on the company and the cash flow; this because they were negotiating with potential partners. They hoped to have an agreement in June, with production starting after the summer vacation.

    After the summer, there was no need to hurry things. Better to have a solid agreement. Production should resume shortly.

    When entering the first period of reorganization in September, they said that they have been negotiation with two OEMs for about half a year (alternatively, from beginning of 2014). One OEM should become a new major owner (rumored to be Mahindra), and the other OEM were interested in developing new technologies with NEVS forming some sort of joint-venture (rumored to be Dongfeng). They had been negotiating with these two independently, and now they should bring them together at the same table to get them to know each other. [To me this sounded really weird.] They also said that the Chinese partner (City of Qingdao) never fulfilled the deal and that they didn’t know why.

    In October/November everything was moving along as planned, according to NEVS. Yes, it may take a little longer than expected but better to be thorough and than rush things.

    In November, they didn’t think a write-down of debts were needed. Maybe they would apply for an extension, but there could also be a deal before that. Then all of a sudden there was a letter of intent with a major OEM that granted them an extension. This OEM would conduct a due diligence in December before taking it before its board of directors for a decision. A deal should be in place in January/February.

    In January/February they said that the due diligence were now instead planned for February, but negotiations were ongoing. Then they needed a second extension of the reorganization and a debts reduction.

    How can the court trust their claims after all this? How can they over and over again be so far off in their prediction on were they are in the negotiations? To me that indicates that either there has been major changes along the way (basically resetting the negotiations to square one) that thay couldn’t predict, or they have been lying about that status of the negotiations. Because I can’t make sense of what they so far have claimed. Victor Muller picked up Saab Automobile in about three months. How can two OEMs still negotiating on a deal with NEVS after more than a year – a deal with a small company that has no production, a skeleton workforce, and no market presence? How long did it take Geely to buy Volvo Cars from Ford?

    1. I am listening to you think out loud and I am feeling and have been thinking the same for some time. The handwriting has indeed been on the wall for months, one just needed to read between the lines. I have long believed that NEVS is up to something other than what is being reported and expected.

  6. Sadly this apparent big news is still very irrelevant. Sadly Saab died after GM. If Mahindra are behind the buyout then I personally feel the lack of information is detrimental to the sale. This has been talked about for a year now and in that time NEVS has lost a tonne of money, the brand name has pretty much faded into insignificance meaning if Mahindra had clearly and openly expressed their interest at the beginning, they would have an easier time in sustaining the brand image whilst they negotiated a deal.

    I wouldn’t walk into a Porsche dealership and talk the ass off the salesman for a year about buying a car, if I knew from the onset the negotiations were leading nowhere. The fact that NEVS in now in their 3rd reconstruction phase would suggest they have presented enough evidence to the Swedish court to grant that, especially given that SvD’s “No ongoing deal” article was printed before this current extension.

    The chances of a 4th extension is no doubt off the cards so one way or another we’ll find out where NEVS has a new owner in just over a month.

  7. Thanks for a good and clear article again, Swade. This more or less same perspective on the article of SVD is also explained on Saabblog.net and SaabsUnited. The arguments of SVD seem really strange. Ridiculous actually, wouldn’t make a lot of sense for the parties involved (Mahindra would surely expect to pay a fee for the usage of the brand name SAAB that seems to be very important to them and just writing a letter of intent without any interest in the company to keep NEVS in reorganization won’t happen that often I guess), but still they write it down.
    The official reactions of SAAB AB and NEVS and the indications written by you earlier seem to give a more positive perspective on things, and objectively I think those sources are the ones who know.

  8. I’ve already said this, but I repeat it here. A Newspaper that uses pictures of Saab cars on an article on SAAB AB has a very special editorial line IMHO.
    Yes it is a close up, and maybe not many have noticed it, but why don’t they use any press pictures of SAAB AB or sent some photograph to Linköping to take some pictures of the buildings there so the can use proper pictures.

    1. How do you mean? The article is about NEVS reorganization, so what is wrong with a picture from the car factory that they own? It may be easy to dismiss something that is considered bad news, but I would not recommend that. I live in Sweden and have probably read every news article in Swedish media about Saab for 10 years now in their original language. SvD has (together with ttela.se, gp.se and di.se) been right about things in the end. People may not like it when they read it, and as I said earlier I do not like Fröberg’s style in writing overly dramatized articles But that aside, the basic news in SvD’s articles about Saab and NEVS over the years has been correct.

      If one read the article in question very carefully, they never claim that Mahindra is out of the running. They just say that they have given up on obtaining the Saab brand name and that they are not interested in becoming the new main owner of NEVS (buying NEVS). But they could very well still be interested in investing and/or having some joint venture.

      1. Pingu, SvD has used a picture of the rear light bar of the 9-5 II to illustrate an article on SAAB AB and the new Swedish policy on Saudi Arabia.

        I’m not dismissing anything, but if there is only one source and no other confirmation whatsoever of a piece of news, I rather give that article low credibility, but that’s just me.

  9. I have to say that M signing an LOI when it has already decided not to do the deal is crazy talk. What incentive would it have to do so? I am a lawyer regularly advising on cross border m&a, and believe me, parties generally only go through the enormous expense of negotiating and executing such agreements if they have a good business reason for doing so. The reputation risk and cost is just too great. This mess is really starting to sound like Crazy Town.

  10. Has there ever actually been any confirmation that the OEM was Mahindra? Or has this been pure speculation all along?

    1. Pure speculation, as far as I know. NEVS has always declined to comment on those companies identities, and the reorg lawyer has never stated in public who those are. Mahindra seems to be mentioned by third parties in some official court papers, but at that time (Nov/Dec) it was a minor creditor without a place on the creditors board. So it could very well be hearsay from their part. I haven’t seen anything after the December extension about some new source of that information.

  11. If I can make some totally uninformed speculations here on this Sunday morning… 🙂 Sometimes is’s fun as long as you realize it is just that – uninformed speculations!

    A few days ago I noted that Volvo AB has completed a 45% acquisition of Dongfeng Commercial Vehicle in early January. Dongfeng is the *rumored* Chinese part of the NEVS equation. I also noted that in early March Volvo made billions of SEK in selling shares in an Indian manufacturer (Eicher Motors Limited). What if that cash infusion in Dongfeng CV (paid for by selling shares in India) makes it possible for the Dongfeng Motor Group (the parent company) to be the new main investor in NEVS? To make it more interesting, note that Dongfeng is one of the major owners of the PSA group (they rescued it in 2014 together with the French Govt.). Synergies in Peugeot, Citroën and technologies for electric cars could be there. PSA formed a JV with BMW for electric vehicles in 2011, but it only lasted a year before BMW pulling out. They will also end their cooperation on small gasoline engines in 2016.

    1. Just a short note, Dongfeng (mother company) is in the business of producing military equipment for the the Chinese military, so it’s highly unlikely that Saab AB will license the name to them. I guess this is the main reason to move development to a separate company in order to keep Dongfeng out from the domain of the Saab name, and letting Saab AB truthfully claim that they are not involved in any business talks with Dongfeng whatsoever. Which they did last year.

  12. So the sad and very possible reality here is that Mahindra is not interested at all, and stopped being (if it ever was) a long while ago. And all this talk for the last year or so has been just that…? C’mon! Seriously?
    Actually, when you start to look more closely at the present situation, it may well have been a well planned and executed diversion, smoke and mirrors, to keep everyone’s attention focused away from where the real action is.
    Where IS that then….? I wonder.

  13. An interesting discussion. Many informative speculations from Pingu. Whatever it is, there’s definitely something going on.

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