14 DAY TRIAL // Fraud is not fun for the people reaping the consequences, and Zalman unfortunately has to experience that for itself now that Moneual's extensive financial lies have been uncovered.
Throughout history, people have shown themselves capable of some really extreme things when it came to self-preservation.
Unfortunately, some of that mentality tends to transfer over to the corporate environment, where owners of a company or another can take unlawful and outright harmful measures in order to avoid a stock drop.
It turns out that the executives of Moneual, Zalman's parent company, have been cooking up fake sales numbers and export figures for some time, in order to pick up large fraudulent loans that could never be paid off. Zalman's export figures happen to be among the information that was falsified.
Zalman has filed for bankruptcy
The company really doesn't have a choice now that the entire mess has come to light. It lacks the funding and security to do otherwise.
The fraud came to light when a former Moneual employee took the details to the press, showing that CEO Harold Park (Hong-seok), Vice President Scott Park (Min-seok) and Vice President Won Duck-yeok made Zalman inflate sales and export data for the purpose mentioned before.
The total loans amounted to almost three billion dollars ($2.92 billion / €2.33 billion) and can never be paid back, which is why Zalman is filing for bankruptcy protection with the Seoul Central District Court.
Meanwhile, the top Moneual executives, and 13 other mid-level ones, have been arrested for export fraud and are looking at a fair few years in prison.
Zalman's business profile
The company is well known for its various cooling products, and the fact that Moneual could even get away with the inflated sales reports suggests that the brand has a high enough reputation and brand strength that it might have pulled them off for real if not for the competition.
Since the fraudulent loss happened without anyone on its end actually being involved, the outfit might actually survive this, but only if its request for bankruptcy protection is approved.
If the court rules in its favor, the company will still have to struggle for a few years before it gets back on its own two feet.
It would be a shame if it collapsed the rest of the way. The company's air- and water-based cooling products are actually none too shabby, if we do say so ourselves.