discussion EK Not paying employees vendors and more.

[FreeKnight]

Gamers Nexus just did a follow up video and it looks like it gets worse.

Oooofff watched that video and it's pretty damning. EK might have sailed through this if they had hunkered down, but I feel like this is going to decimate any public goodwill left.

That web of companies looks like it's something a person setup to launder money.

It's not actually that unusual for multinationals, especially ones that are trying to grow and expand in multiple countries. The 'marketing firm' and swiftech involvement with their US CEO screams of scummy backdoor deals and attempts to fleece though. I've seen executives at O&G firms that got fired for doing the same thing with contracts awarded to material supply companies or equipment firms that the Director or VP happen to own.

I doubt we'll see EK for much longer. Between this, declines in quality and the fact that they're still really expensive (arguably overpriced), I doubt we'll see EK survive too many more years. As much as I generally try not to go with cheaper Chinese companies, when I priced out going EK vs Barrow for my latest build there was no way I could justify the 2-3x price point to go EK over Barrow.

Watercooling is a niche of an already niche market. Most of the people doing it are enthusiasts and will be well aware of the controversy, if not now, by the time they do their next build. Burning your goodwill with the community and running uncompetitive pricing is not a easy situation to recover from.

 

[moocow]

Now that I sub to KitGuru, I see he did 2 additional videos on this topic.

He interviewed EK's CEO in which the CEO call the whistleblower a liar a few times.

Then a follow up interview with the whistle blower. My only take away was that EK was trying to partner with Microcenter to see PC and the deal got no where.

 

[moocow]

Thread necro time!

OC3D reporting EK problems aren't over with their head of product marketing joining Noctua and lead product designer joining Thermal Grizzly. EK responded to OC3D's original article and OC3D's reply indicate GN is working on another video.

Is the end of EK in sight?

Top employees leave the water cooling company as financial woes continue.

overclock3d.net

EK Responds to OC3D

Pay attention to what they DIDNT say

overclock3d.net

 

[Jokester]

 

[gingerbee]

^^^^^ this is crazy^^^^^

so it seems they started as a group of people who didn't know how to run a big company even when they weren't one, but they hired leaders who did and those hires built the company into one ten times the size, it was then the original owner/leaders took back over and ran it into the ground. That sounds about right to me

 

[Marzipan]

I do NOT want to spend over an hour listening to this. what are the cliff notes?

 

[Izerous]

I do NOT want to spend over an hour listening to this. what are the cliff notes?

-EK's Inner circle of managmenet are scum bags and abuse anyone outside the circle. That includes all manufacturing partners and employees.

-One employee mentioning "It is a novelty to get paid" (got a new job). Emplyee actually was forced to renew their mortgage at a higher rate because of missed payments etc. That is a super disapointing kind of statement. Can tell that guy probably cried himself to sleep.

-When the compnay split into 2 (after one of the inner circle being promoted to CEO) seems to be when the death spiral really starts.

-Taking out higher interest loans to make back payments on lower priced loans and outstanding debt to employees and contractors etc.

-Super angry at de8aur and thermal grizly for hiring an employee (who wasn't getting paid under EK)

-40 person layoffs when they couldn't pay staff, afterwards they sent out communications that anyone who wanted to leave voluntarily in the next wave could add their name to the list... so many people signed up they had to stop those people from leaving.

-missed enough employee payments to actually trigger slovenian labour law investigation. People loosing credit ratings, unable to pay for children school supplies. 30 emplyees gathering up to sue the company outright.

-Executive were getting 30k Euro monthly paychecks when employees who were only getting paid 30k Euros/year were not even getting paid

-As of June ~30million euros in accumulated debt (2.5m to contractors rest mostly to other externals)
(About timestamp loan deathloop and the details are sprialing so far out of control into the area of shady actions and practices it is kinda scary with some employees 3 months + without pay and starting to threaten employees, retailers etc)

-Recordings of Marko insulting and threatening employees, from the outside it looks like Marko is draining all cash from the company (his personal and related companies billing EK). Things like 750k Euro invoices for failed websites, 100k consulting invoices.

-More lack of tax payments issues, including Texas suing them for backpayments (almost 7k USD + over 9k to other US entities in taxes).

-Kat spending money like it is going out of style only in the San ANtonio office about 1 day a month and partying it up the rest fo the time. San Antonio staff found out they were all fired/laid off when people showed up to change the locks to the building.

-Matjaz Krc spent 100k on solar paneled battery banks so people could work if there was a power outage... (Steve was less nice about it than that)

-EK Racing sim took deposits but never delivered and whole project was started up in spite because an employee left for a racing sim company start up

-Revisiting 100k+ debt to Jayz2Cents, including statements where Jay outright said pay employees first. And when EK did pay him was a point when a bunch of employees actually didn't get paid. (Along with other media besides Jayz)

Remember the EK Barebones line...
-Microcenter asked for lower value products for their inhouse PC building. Instead Matjaz took a bunch of money to buy inventory and tried to take Microcenters PC building into EK which wasn't what Microcenter asked for and made Microcenter management mad so they cut the agreement. This is what turned into the barebones line which was commercially a flop. All microcenter wanted was lower valued parts to help with custom inhouse PC pricing and margins. This whole failure resulted in Texas closure.

--------

-Steve: Can EK be saved? Short answer no, long answer noooooooooooooooooo...

-Back in May their burn rate was 1million Euros a month !!!!!!!!!!! That is a absolutely ridiculous burn rate for a company their size.

-Gigabytes of evidence that further makes them look bad that not even included in this video.

-Audio recording of Marko out right mentioning company is at serious risk of insolvency

 

[Marzipan]

it seemed they were doing so well...was it the split when the trouble actually started or did it begin and they thought the split would help hold back the floodgates?

but heck...loans with higher interest to pay of loans with lower interest? that's insanity!

 

[gingerbee]

it seems to have started when Ed and his buddy took back over and pushed out their CEO, around 2017

How about ED's buddy ( second in charge ) billing 30,000 euros a month to EK, yet they wouldn't pay their staff? Ed defended this to his staff as "crisis managers need to be paid well", with Most staff only making between 28 and 35k euros a year. They seem to have just been burning cash any way they could. So much of this seems super sketchy

This is a crazy watch, if all is true.

 

[sswilson]

My takeaway was focused more on the "friends" of management who were billing large amounts for third party consulting. No indication if they were also in the "not being paid" column, but the amounts were significant, and looked very much like C Suite looting which resulted in insolvency.