Corporate Fraud Drives Zalman to Bankruptcy
by E. Fylladitakis on November 6, 2014 11:35 AM EST- Posted in
- Cases/Cooling/PSUs
- Zalman
This month is not starting very well for technology enthusiasts. Most of us have fond memories of Zalman, a company that has been producing advanced cooling solutions since 1999. Some are old enough to remember the fan-like CNPS6000 Socket 370 coolers and the first Reserator liquid cooling kits. Zalman was one of the pioneers of low-noise cooling solutions, in an era when stock coolers were noisy enough to drive people insane. Unfortunately for us all, on November 3, 2014 the company filed a bankruptcy protection request in the Seoul Central District Court.
Zalman did not fall victim to recession, competition or even bad corporate management. The whole story is long, complicated, obscure and yet unconfirmed, so unfortunately we may never learn all the details of it. To summarize, Zalman apparently was part of an allegedly very well designed and planned multi-billion dollar corporate fraud.
Zalman is a child company of the robotics manufacturer Moneual. According to The Korea Times, Moneual failed to repay their (massive) export bonds that matured on October 20, 2014, and ultimately filed for bankruptcy. Ever since that incident, Zalman's stock price also began a quick downfall. However, the numbers just do not add up - Moneual has been repeatedly reporting major profits, with their 2013 annual report being nearly 1.2 billion dollars in sales and over 100 million dollars in profit. The local authorities naturally became very suspicious and initiated investigations, the preliminary reports of which indicate that there is evidence of a well-designed corporate fraud.
Long story short, Moneual allegedly acquired Zalman in 2011 as part of their master plan. They forged Zalman's export and accounting documents, greatly overstating their export and income reports, in order to become eligible for huge bank loans. What is even more interesting is an article posted by the Korea JoongAng Daily, where an employee claims that most of the employees knew that the company was a sham but, despite the unearthly profit reports of the past few years, no government officials raised an eyebrow.
During that time, Moneual received about 620 million dollars in loans from several Korean banks and another 275 million dollars as export credit from the Korea Trade Insurance Corp, making the owners of Moneual richer by nearly 900 million dollars, money that will likely never be repaid. They have been arrested and, alongside many top- and mid-level executives of the company, are now facing prison time. Unfortunately, the architects of this fraud may not receive what punishment they deserve; the CEO of Moneual has U.S. citizenship and his brother has Canadian, and there's some concerns that Korean law could face trouble prosecuting them.
Unfortunately, we have little confirmed information on the matter but, from the looks of it, no one from Zalman was involved in this fraud. Depending on the court's decision, there is the possibility that Zalman will be granted bankruptcy protection and severed from Moneual's control. However, even if that happens, Zalman will certainly not have the capabilities they used to and will most certainly struggle to compete on a global scale.
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Bob Todd - Friday, November 7, 2014 - link
Thanks for that link by the way. I hadn't seen an enclosure that did ODD emulation before. I just ordered the older model. It's cheaper there than Amazon, and there's a rebate too.http://www.newegg.com/Product/Product.aspx?Item=N8...
FITCamaro - Thursday, November 6, 2014 - link
:( I love Zalman products. Granted in more recent years there are better options, albeit at higher prices. But they still offer great products at good prices.Sttm - Thursday, November 6, 2014 - link
I still fondly remember that heavy copper beast of Zalman's that I put on top of my Athlon way back in the day. I hope someone puts a few of those bad boys in a sack and goes to work on these people.zlandar - Thursday, November 6, 2014 - link
Last time I bought a Zalman product was a cpu cooler that was on deep discount. I can't think of any product they make that stands out when I look at hardware reviews when building or updating a new rig.julianbautista87 - Thursday, November 6, 2014 - link
hmmm, how sad. Coincidentally my zalman lga 775 cooler died last week (damaged fan).xakor - Thursday, November 6, 2014 - link
[...] may not receive what punishment they deserveThe notion of punishment is deeply ingrained in our culture. Punishment doesn't fix the past, it doesn't prevent the recipient from doing it again and doesn't help in rehab. Contrarily to what one might think, the idea of vengeance for harm done to oneself doesn't bring closure either.
The purpose of our justice and correctional system isn't to punish but to protect the rest of us from further harm and ideally contribute to rehabilitation.
I recommend you document yourself on the topic. In particular, Free Will's reading by Sam Harris on YouTube is excellent.
kyuu - Thursday, November 6, 2014 - link
Right. So people who steal or kill or do other wrongs, we should shrug our shoulders. Contrary to what you apparently believe, "rehabilitation" is pretty much a fairy tail. People who *want* to become law-abiding citizens will, those who don't, won't. Of course there are socio-economic factors at play as well, but you can't shrug your shoulders at law-breaking because the perpetrator was poor or socially disadvantaged.kyuu - Thursday, November 6, 2014 - link
Damnit Anandtech, this is a tech site. Why the heck can't you get a comment system in place that allows edits?!fairy tale*
Veedrac - Thursday, November 6, 2014 - link
> Right. So people who steal or kill or do other wrongs, we should shrug our shoulders.That's a straw man. xakor said
> The purpose of our justice and correctional system isn't to punish but to protect the rest of us from further harm and ideally contribute to rehabilitation.
Where in that is the claim that we should let people get away with murder? That is neither protecting the rest of us nor contributing to rehabilitation.
> Contrary to what you apparently believe, "rehabilitation" is pretty much a fairy tail.
Denying that rehabilitation works requires denying the overwhelming statistical evidence in its favour. If I were to cite any one thing, it would be this¹ because of the number of relevant citations to elsewhere and a convenient summary of their results.
¹ http://www.tandfonline.com/doi/abs/10.1080/0741882...
E.Fyll - Thursday, November 6, 2014 - link
Let me clarify. You very correctly said that "the purpose of our justice and correctional system isn't to punish but *to protect the rest of us from further harm* and ideally contribute to rehabilitation" - ultimately, that is all that matters.Yes, punishment will not fix the past. Yes, it hardly helps (more likely harms) in rehab. People make mistakes and I do agree that a vengeful, strict law system is doing more harm than good. But when someone plans a fraud of this magnitude, they knew exactly what they were doing and planned it several years in advance. These people are just plain dangerous, fully aware of the consequences of their actions and the notion of "rehab" is just plain silly in such cases.
By "punishment", I do not suggest that they should be flayed alive and hanged in public, but I do believe that keeping such minds behind bars would make the world a sliiiiiiiiiiiiightly better place. I also believe that getting people like these, who damaged or even destroyed the lives of who knows how many people, in a cold damp cell somewhere, would almost certainly make a lot of people feel some satisfaction, even if only temporary. I know that at least my breakfast would taste better if I read that they are going to be spending the rest of their lives in jail. Letting them enjoy the nearly one billion dollars they stole will be a huge hit to humanity.