Wednesday, November 5th 2014

Zalman Files for Bankruptcy for Major Financial Fraud by Parent Company

Popular PC cooling products maker Zalman filed for bankruptcy, in midst of a huge controversy by its parent company Moneual. Executives of Moneual cooked-up sales and export figures from Zalman to markets like the United States, in a bid to pick up large fraudulent loans for the company, which it could never pay off, pushing it to bankruptcy.

The controversy came to light, when a whistleblower former-employee of Moneual took these details to the press. It's alleged that CEO Harold Park (Hong-seok), Vice President Scott Park (Min-seok) and Vice President Won Duck-yeok committed a fraud, in which subsidiary Zalman would inflate its sales and export data, to qualify for large bank loans. The trio then used it to lift US $2.92 billion in loans, which the company could never pay back. Zalman has since filed for bankruptcy protection, with the Seoul Central District Court; while the three top Moneual executives, and 13 other mid-level ones, were arrested over allegations of export fraud.
Source: Futurelooks
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39 Comments on Zalman Files for Bankruptcy for Major Financial Fraud by Parent Company

#1
rtwjunkie
PC Gaming Enthusiast
Wow. I'm interested in seeing how this plays out, including what becomes of Zalman post bankruptcy, since this case is obviously much more complicated.
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#2
SaltyFish
This reminds of what happened to Abit a while back. If Zalman survives, I wonder if it'll be in the way OCZ is surviving.
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#3
Chaitanya
"rtwjunkie said:
Wow. I'm interested in seeing how this plays out, including what becomes of Zalman post bankruptcy, since this case is obviously much more complicated.
Something similar to OCZ probably, but since unlike OCZ these guys are much more of a speciality I am more interested in seeing who will take over Zalman. Its a shame though that a manufacturer like Zalman has gone bust.
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#4
CookieMonsta
I'm particularly interested who gets to scoop up Zalman's patents. IIRC they have a patent on heatpipe cooling for PSUs so it'll be interesting to see if it becomes public domain or if someone like Corsair/EVGA/Seasonic picks it up.
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#5
Octopuss
So does this mean Zalman was very unsuccessful company, despite the popularity of some of their products?

Was the fraud attempt to save it, or to steal money?
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#6
lZKoce
Shocked, literary. First news I see for the day, and my jaw has dropped. Zalman has amazing stuff throughout the years. They've just announced Z11 Neo...I need more info on the subject matter. It's kinda sad event.
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#7
Mathragh
As I read it on other sites, The major fault lies with the parent company, and in that sense apparentl Zalman itself is more of a victim, with the parent company being the major fraud.
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#8
micropage7
"lZKoce said:
Shocked, literary. First news I see for the day, and my jaw has dropped. Zalman has amazing stuff throughout the years. They've just announced Z11 Neo...I need more info on the subject matter. It's kinda sad event.
yeah, although im not a fan of zalman
zalman is old player and thats kinda sad.
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#9
buggalugs
Shame, Zalman have been around so long, although I have never been impressed with their products generally.
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#10
NC37
"Octopuss said:
So does this mean Zalman was very unsuccessful company, despite the popularity of some of their products?

Was the fraud attempt to save it, or to steal money?
Nah, there is still value in their products. Just the problem is the industry is too saturated. Everyone runs the same designs, nothing really sets them apart by much.

Zalman made many niche designs and custom designs, good ones, but usually for a premium price. Problem is with soo many players and performance being obtainable by products at lesser price brackets, Zalman competing on name just can't work. Specially not when you have CM and others who strike great price for performance ratios and rake in all the press.

Zalman didn't change with time. Nor did they keep their name out there strong enough. Probably have management that figured they'd run forever on their name. Got lazy, then lost in the sea of competitors.

I honestly looked at Zalmans many times over the years but always went with a competitor because the price premium for the Zalmans were too high for what you got. Everyone would swear by them, but reviews wouldn't lie.
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#11
TheDeeGee
"NC37 said:
Nah, there is still value in their products. Just the problem is the industry is too saturated. Everyone runs the same designs, nothing really sets them apart by much.

Zalman made many niche designs and custom designs, good ones, but usually for a premium price. Problem is with soo many players and performance being obtainable by products at lesser price brackets, Zalman competing on name just can't work. Specially not when you have CM and others who strike great price for performance ratios and rake in all the press.

Zalman didn't change with time. Nor did they keep their name out there strong enough. Probably have management that figured they'd run forever on their name. Got lazy, then lost in the sea of competitors.

I honestly looked at Zalmans many times over the years but always went with a competitor because the price premium for the Zalmans were too high for what you got. Everyone would swear by them, but reviews wouldn't lie.
The fact that they don't allow you to swap Fans on their Coolers is also a bad move.
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#12
Live OR Die
I used as lot of zalman parts when i built my 1st 775 rig back years ago i loved there VGA and CPU coolers also had one of those $200 zalman cases.
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#13
entropy13
"Chaitanya said:
Something similar to OCZ probably, but since unlike OCZ these guys are much more of a speciality I am more interested in seeing who will take over Zalman. Its a shame though that a manufacturer like Zalman has gone bust.
OCZ are only either memory-based products (RAM and SSDs) and PSUs, AFAIK. Zalman has cases, coolers, PSUs, and other computer peripherals like gaming keyboards and mice. Not to mention monitors and other things.
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#14
dj-electric
I never really liked zalman, not from a long long time ago.

Their coolers are over-priced with bad competability, most of their cases are mediocre at best.
Just... no. It's time to go.
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#15
cyneater
Dam.

Zalman made some good gear. Yes it cost more but it worked.
Unlike thermal mistake there low noise coolers where low noise.

Compadability and brackets etc where a pain in the backside.
I was very annoyed I could not use my zalman CNPS9700 on my socket 1150 board. I had for ages.
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#16
Live OR Die
CNPS9700 thats because it was made for 775 lol.
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#17
rtwjunkie
PC Gaming Enthusiast
All I know is if you select well, they have great cooling. When youre looking in max aircooling category you aren't worried about cost. Yet people are taking this opportunity to bash them because their products are a tad more expensive.

Recently I had forgotten to replug the fan on my 9900Max. I spent almost a week playing games, watching videos, and even a 20 minute run of Prime95. My 3770k never overheated with just case airflow over the zalman heatsink, despite my forgetting to plug the heatsink fan in! It was only because I noticed the fan RPM's were 0 that I even investigated.

As far as that is concerned, that is a good heatsink design. So yeah, I'm interested in the company future and if they survive the shenanigans and criminal action of their parent, and I hope they come through this in some form.
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#18
Aquinus
Resident Wat-man
Why are you people bashing Zalman when this was fraud committed by the parent company which has absolutely nothing to do with the quality of their products? Last I checked my CNPS9900 cooled my i7 3820 just fine and this news article doesn't change that. They exaggerated export quantity to get loans that they couldn't pay off, not the quality of their products. Or in laymen's terms, they over reported how many units they sold.
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#19
Mathragh
"Aquinus said:
Why are you people bashing Zalman when this was fraud committed by the parent company? Last I checked my CNPS9900 cooled my i7 3820 just fine and this news article doesn't change that.
seems like these venting posts are becoming the norm, usually at the expense of a more conversation-like and on topic resonse.
Imho its sad to see this manufacturer suffer for the greed of their parent company. They seemed to be one of those companies that were set on just doing stuff their own way; providing the market with much needed alternatives and occasionally keeping the other players on their toes.
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#20
Aquinus
Resident Wat-man
"Mathragh said:
seems like these venting posts are becoming the norm, usually at the expense of a more conversation-like and on topic resonse.
Imho its sad to see this manufacturer suffer for the greed of their parent company. They seemed to be one of those companies that were set on just doing stuff their own way; providing the market with much needed alternatives and occasionally keeping the other players on their toes.
I agree, I don't think this reflects badly on Zalman. The real crooks are the management over at Moneual.
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#21
djisas
Still running a CNPS9500 for over 5 years or more and it has seen many cpu's, i also still running a zalman heatpipe PSU.
The old CNPS 7000 cu was also a jewel i run for the longest time...

Sad to see them going...
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#22
FordGT90Concept
"I go fast!1!11!1!"
"Octopuss said:
Was the fraud attempt to save it, or to steal money?
The definition of fraud is more or less theft so their aim was to borrow money with no intention to repay using Zalman as an instrument to do so.

I could see Zalman getting bought out by another company for pennies on the dollar.
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#23
rtwjunkie
PC Gaming Enthusiast
"Aquinus said:
Why are you people bashing Zalman when this was fraud committed by the parent company which has absolutely nothing to do with the quality of their products? Last I checked my CNPS9900 cooled my i7 3820 just fine and this news article doesn't change that. They exaggerated export quantity to get loans that they couldn't pay off, not the quality of their products. Or in laymen's terms, they over reported how many units they sold.
Well said, and pretty much what I was trying to convey about quality with my little personal tale. I've used their products for years. Hell, I used a CNPS-9300AT to effectively cool an overclocked QX9650 for several years with it's high TDP, with no issues. Not alot of coolers back then could do that without being huge towers!
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#24
GhostRyder
"Aquinus said:
I agree, I don't think this reflects badly on Zalman. The real crooks are the management over at Moneual.
I agree with you, I am very sad to see this because I to like zalman products and never had any major complaints with them.

A friend of mine has one of these coolers on his i5 3570K and it looks cool along with being great on performance so from my perspective they make quality products. Its a shame that this is happening to them because we might lose them for good.
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#25
Katanai
Damn, I have a Zalman PSU in my computer, still under warranty. I only purchased it like 4 months ago. I guess it has no warranty now. :( For those hating on Zalman: I also have cnps9700 copper cooler and it has worked flawless for almost 10 years in a lot of different systems and it's one of the best CPU coolers of all time.
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