Fusion Garage Disintegrates: Founder Creating New Company For Lots More Fraud?

Last month Fusion Garage, a Singapore startup that has defrauded just about everyone and everything it has come in contact with, had a huge flameout when they were publicly fired by both their law firm and PR firm.

Since then, not a word. Except for a “gosh, everything’s just fine” “interview” by Engadget, which failed to grasp the seriousness of the situation. (Engadget has a history of loving everything Fusion Garage – my favorite quotes are from this 2009 interview where they said “Seriously, we were quite impressed [with the device]“). For the record, documents obtained via our lawsuit with the company showed that a total of 93 of those impressive little devices were ever sold.

Anyhow, Business Insider reports that the jig is up, and nothing Engadget or the Verge can do can save the company any longer from creditors. Did you buy a device and are still waiting for it to be shipped? Line up with $40 million in other creditors to get your refund.

CEO Chandresekar Rathakrishnan isn’t done yet, though. Here’s an interesting tweet from someone who worked for the company, noting that a new company is being formed: “I’m amazed about how badly a company can screw up, I can’t imagine that many people will be left once the new company is formed.”

In case it isn’t crystal clear, it looks like Fusion Garage is trying to get out of all that pesky debt, take as many employees as possible, and start a new company. This is what lawyers call fraud, which is exactly what I’ve been screaming for two years now.

It is the responsibility of the press to point out evil when they see it. Not just sweep it under the rug because one of their competitors (in this case, TechCrunch) were the ones being attacked. Some readers (thankfully very few) bought these devices based on these absurd reviews. There’s no excuse for that.

In the end, the press got played badly by Rathakrishnan. In litigation discovery it became clear that he, working with his PR firm, timed the fraud in anticipation of us screaming murder, hoping that other press would love the drama and immediately make him the hero. The only thing they got wrong was that they thought we wouldn’t sue. We did. And it’s over.

41 thoughts on “Fusion Garage Disintegrates: Founder Creating New Company For Lots More Fraud?

  1. Max Woolf says:

    They only sold 93 JooJoo tablets? That’s still more sales than the Blackberry PlayBook.

  2. John Best says:

    I feel bad for the employees, but I suspect even they must have seen this coming.

  3. Another sad ending… :-(

  4. -

    well, for those who have been defrauded of something by someone, but aren’t so famous like Michael to have a media world coverage about their sad story, I just created and put online an unique in the world site!

    http://www.StolenIdeas.Org

    -

  5. I’m not a fraud, Arrington is the fraud.

    BTW you can make $560 a day working from home, all you need is a computer. Click my link here:

  6. I have one of the “Crunchpads” they had given away for free at the Founders forum in London, I keep it as a souvenir for you

  7. Tim F. says:

    You got played too, Mike. Funny how you make it seem as if that is not so, or as if somehow the CrunchPad would have been brilliantly successful if you had never had been played even though you were always dependent on these guys.

  8. TruthofChandra says:

    Chandresekar Rathakrishnan is a honorable man and a genius engineer. He designed the tablet from scratch on his own and had an amazing vision. Remember, this was before the iPad and his vision was close in performance and usability. He is a great man. And he is only 24 YEARS OLD !!!!!!! He is a multi millionaire right now and living large in Singapore. He is currently doing his next venture in social media and has raised 30 million USD to disrupt a 40 billion USD industry. Only highly qualified and reputable investors are allowed to participate in the financing. If you are interested, please drop me a line at Chandra@rathakrishnan.com.

  9. So what’s to care about here Mike – you say screw the employees; ok. So I’m left with the company – crap, the joojoo – vapour and the investors – who should expect some rough investments.

    There isn’t really a story then.

  10. Nothing fraudulent about a company going under with debts and a new company being formed by the people involved, I think Mike needs to read up on business law before he makes such accusations, as usual all hot air and no real knowledge.
    But then Mike invented the tablet didn’t he ! Any wonder JooJoo didn’t want the crunch name associated with their product, oh wait is this a tech blog with crunch in the title not owned by AOL ….FRAUD !!!

  11. Thyaga says:

    Fundamentally $200 tablet was a pipedream and the founding team sold this idea to investors. As usual investors are gambling, they invested without having any knowledge of this domain. They deserve to loose and infact they should be fine with it.

    Michael Arrington should disclose his contractual/factual relationship with this company. How much money did he invest and why ? I suspect a case of serious conflict of interest on his part, since he was also involved in TechCrunch.

    • I thought the relationships had been very well disclosed (given the pending suit) – there must be thousands of similar issue ongoing just in the US alone – let alone globally.

      As Amazon have a $200 tablet I’m not entirely sure it was such a pipedream.

  12. TruthofChandra says:

    MIke is a big time SCAMMER AND A H O L E…. He uses his popular platform to DESTROY anyone he DOESNT like. ARROGANT P R I CK !!!!!!! Anyone who knows Mike personally would agree with me….Its Mike’s way or you will be crucified…Mike – One day you will get your comeuppance and I will be there to laugh and let you get DESTROYED !! Hope you FAIL Mike !!

  13. Loving the entertainment big M….keep it crunched :)

  14. RightTHing says:

    I have followed this case for 2 years and read the detailed deposition on scribd with all the emails from all parties. Here is my conclusion. Mike Arrington wanted to get paid for simply giving the basic idea. This whole case is the same as Mark Zuckerberg (Chandra) and the Winklevoss twins (Arrington). Chandra was pressured by his investors (obviously) to maximize their returns by minimizing Arrington’s share since he contributed nothing to the execution of the project.

    All in all, I think this case shows Mike’s true colors. He is indeed a vengeful, spiteful person who uses others to do dirty work but readily wants to get the credit for their work. He is in love with himself and loves the limelight. His ego is unstoppable.

    I am not taking sides, but having reviewed this case, Chandra is an impressive guy who has executed very well with very little support from Mike and his investors. He worked really hard to execute Crunchpad or JuJu.

    Mike – Please do the right thing and apologize publically and make it right with Chandra. He is nothing like what you make him out to be and it is absolutely disgusting for you to write this kind of nonsense about him and smear his name. I hope you realize your mistake and do the right thing before it is too late….

  15. Adeo Ressi says:

    Michael, last I checked, Singapore corporate law does not have US-style bankruptcy protection. There is shareholder liability for outstanding debt. You may want to look into this.

  16. I had a company try to pull that one on me. I called them on it. Got the bankruptcy court involved and everything.

    Some of the other employees got some payments for their work, but in the end I got absolutely nothing. Save the warm feeling that comes from being an ethical person. Which, in hindsight, is not bad.

  17. Regina Shwartz says:

    Wait, can someone tell me why there are no criminal charges being filed against that SOB Chandresekar Rathakrishnan and Jonathan Bloom when it’s so clear that they were orchestrating this as a fraud to begin with? These douches need to be in prison.

    • RightTHing says:

      You are an idiot. As usual judging without evaluating any info. Have you read all sides to this story? The basic claim that Mike has is that he contributed and hence claims ownership of the IP. No criminal actions were performed. It was a rather dumb concept anyway given that Apple and Google were owning the area. Why would people go for a non dominant OS whose whole claim to fame was a few basic GUI widget improvements…

      The central issue here is that Mike believes he owns the IP. This is very questionable. He came up with a very high level idea AT BEST. Nothing more. ALl the heavy lifting and detailed execution was done by Chandra…

      Dont believe everything you read from Mike. He uses his platform to spout crap that benefits his position…

      • Michael Arrington says:

        That’s not correct. We never made any IP claims in the lawsuit. This is about fraud. I was diligent about talking about these claims and showing evidence supporting it. Chandra said “there are two sides to this” which the press ate up, but that other side was never actually told.

  18. Chandra Movie Mogul says:

    The one who laughs last laughs best! My live action Simpsons movie where i will play Apu just got green lit. It’ll be the highest grossing movie of all time! Now leave me alone..i have to grow a mustache!

  19. Shep says:

    I was a true believer in the what the Crunchpad represented. Not because of the low price, but the ideals of openness in the hardware and software design.

    In every interview with Chandra the deceit is palpable. And although I don’t known Mike personally the stories I’ve heard… well, I’m sure there were personality considerations. Two leaders mixing like oil and water is an old story.

    But what I can’t forgive is that the tiff handed the market to Apple, forever sealing the tablet space as a closed consumer product, which in turn has jump-started the demise of the open general purpose computer platform.

    Mike, please, direct your anger in a productive vector – disrupt the closed model.

  20. Crap Man says:

    Nothing new here, FusionGarage was formed when he liquidated Radixs without paying the creditors and the staffs.

  21. Jess says:

    Crap Man, you seems to be an insider.. lol. Before Radixs even folded, Chandra already had Fusion Garage going and went around secretly roping in key engineers for FS. Next he put his Radixs staff on garden leaves and chained the office. Imagine ths bewildered looks on their faces when the staff turned up for work!!!

  22. John Doe says:

    Rath pay your employees 1st before doing anything. If you don’t good luck with any other ventures; your money is will be worthless and be just part of a pie for other sharks.

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