Gigabyte Loses $5 Million in Fraud
April 27, 2007 1:57 PM
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Regional manager sets up bank loan without company permission
Gigabyte recently made shocking headlines when it announced that it would be
leaving the partnership it had created with long time rival ASUS
. Originally, the plan was to create a joint venture, where the two companies could cooperate on developing and manufacturing new products. Called Gigabyte United, the joint venture would have allowed both companies to share and take advantage of the other's resources.
This week, Gigabyte announced that it had
lost roughly $5 million USD due to an internal scandal
committed by one of its regional managers. Chang Chaosong, factory manager at Ningbo Gigabyte Technology in China, allegedly listed Gigabyte as a guarantor for a bank loan towards a third party loan. By being a guarantor, Gigabyte would be liable to repay the loan if the third party did not repay it.
Unfortunately for Gigabyte, the company or person in question that borrowed the money from the bank did not repay the borrowed money, and Gigabyte was held accountable for the loss. What shocked company officials however, was the fact that Chang did not request company permission before setting up the transaction.
Gigabyte is currently investigating Chang's actions and where and why the transaction was setup in the first place. Chang is no longer with Gigabyte.
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RE: Not good for Chang
4/27/2007 5:04:58 PM
What you say is theoretically true. However, in practice, in the overwhelming preponderance cases, justice is not brought to fraudsters. The Chinese state has had systematic corruption for a long time.
A man with $5 million will certainly have plenty of money to bribe government officials. A couple hundred grand here and there is all it takes. So long as Chang doesn't piss off the wrong government official, he should be fine.
Crime and corruption run hand-in-hand with one another.
RE: Not good for Chang
4/29/2007 8:22:37 PM
The loan was paid to a 3rd-party. Chang might have gotten some of it but not the entire 5 million.
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