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: Regional Manager???
5/3/2007 1:27:40 AM
I read a lot of financial news, to help me make investing decisions. I learned through that news that corruption in China is a big problem, even in the highest levels of business. In particular, the Chinese stock market is hugely corrupt. This point was made in the financial press after the brief world-wide stock retreat a few months ago.
A quick Google pulls up plenty of articles on Chinese financial corruption:
"Wave of Corruption Tarnishes China's
Extraordinary Growth," By David Barboza. New York Times
March 22, 2005.
"Millions of Chinese seek stocks amid 'blind optimism'," By David Barboza. IHT February 16, 2007.
"Only the bravest of bankers boldly go into China," By Paul Wiseman. USA TODAY January 19, 2006.
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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