Imagine a company with an annual turnover of $5.2 billion and more than 100,000 people working in its factories. Now imagine that one day that company suddenly declares bankruptcy. That is exactly what happened to legendary audio equipment manufacturer Akai in November 2000.
For lovers of high-quality sound, the name Akai has long been synonymous with the highest quality and innovation. Their tape recorders and music centers adorned store windows around the world, and the company's logo adorned recording studios. It seemed that this Japanese giant would exist forever. How could such a powerful empire collapse in almost an instant? To answer this question, we will have to go back a few decades, to Japan, where it all began…
At the origins of an empire: how a father and son created a legend
In 1929, engineer Masukishi Akai and his eldest son Saburo founded a small company in Tokyo, Akai Electric Company Ltd. Young Saburo, an evening student at the Tokyo Institute of Technology, brought a fresh perspective and technical knowledge gained from one of Japan's leading technical universities of the time to the family business.
The company's first major success came in 1933 when Saburo developed a compact electric motor. This development caught the attention of a major film projector manufacturer working with the Japanese army. Akai thus received its first major contract and refocused on military orders.
Fate, however, prepared the company for serious trials. In 1939, just ten days after the wedding, Saburo was drafted into the army. During his service, the company produced only products for military needs. In the difficult post-war years, in 1945, the company, like many other Japanese enterprises, effectively ceased to exist due to the consequences of the war. Some sources mention its sale, but there is no reliable data on this.
When Saburo returned from the war, he effectively resurrected the family business from the ashes. Using the connections he had made in the occupation forces, he began working in the sales department. His natural acumen and business acumen quickly bore fruit – the bonuses he earned allowed him to found a new company and regain control of his father's factory. Thus, Akai was reborn like a phoenix from the ashes of war.
That is why there are two founding dates in Akai's history: 1929 and 1946. But what is even more important is that the company gained a leader with a clear vision of the future, ready to bring the most daring technical ideas to life.
From motors to music: how Akai conquered the world of sound
The late 1940s were a boom in audio technology in Japan. Akai, catching on to this trend, began producing high-precision electric motors for vinyl turntables. In 1951, Saburo created a real breakthrough – the C5 motor, which surpassed all analogues on the Japanese market.
But the real turning point in the company's history came with a successful marketing move. Saburo decided to place an advertisement in the American technical magazine Electronics. This move made Akai one of the few Japanese manufacturers to export products directly to the United States, bypassing intermediaries.
Fortune smiled on the company in 1953 when Roberts Electronics owner, engineer Robert Metzner, discovered an amazingly compact and precise Akai motor in one of the turntables being repaired. Impressed by the technology, he sought out the Japanese manufacturer and offered to collaborate.
This partnership had an unexpected result. When Metzner sent Saburo a reel-to-reel tape recorder, Saburo responded by creating the first Japanese tape recorder, the Akai A1. Although the first model was quite simple, the subsequent exchange of technology and ideas between the companies led to rapid development. As a result, Akai began producing high-quality reel-to-reel tape recorders under two brands: Roberts for the American market and Akai for the rest of the world.
The partnership with Roberts lasted until 1971, when Akai entered the American market under its own name, already a recognized leader in the magnetic recording industry. Over the years, the company built a reputation for producing cutting-edge audio equipment, and its reel-to-reel tape recorders became a symbol of high-quality sound.
At the peak of success: how Akai became a technology giant
After Saburo Akai's sudden death at a ski resort in 1973, the company continued to follow his principles, the pursuit of technical excellence at its core. The next 20 years were a period of unprecedented growth and innovation.
Akai pioneered everything related to magnetic recording. The company created systems with an amazing signal-to-noise ratio, developed information screens with timers, introduced Dolby noise reduction systems. The distortion level in their devices was only half a percent – an unheard of figure for the time.
In the second half of the 1970s, the company began a large-scale diversification of its business. Amplifiers, turntables, and receivers were added to the product line. Most of these models are now considered legendary among audiophiles. By the early 1980s, Akai had become the world leader in the production of cassette decks.
The company didn't stop at audio equipment.
They were one of the first to enter the VCR market and made a significant contribution to their convenience, becoming one of the pioneers in the introduction of the on-screen display (OSD), which allowed track information to be displayed directly on the screen. This solution greatly simplified device control and later became the standard for all consumer electronics.
A special mention should be made of the professional series of products launched in the mid-1970s. This line made Akai a recognized leader in the field of professional audio equipment, and their equipment took pride of place in recording studios around the world.
This period of the company's heyday was based on four key principles:
- Focus on high-end products that provide good profits
- Continuous implementation of the latest technologies
- Special attention to futuristic design, which was later copied by competitors
- Large-scale investments in product promotion
A time of change: how Akai tried to adapt to a new era
The second half of the 1980s brought major changes to the electronics market. Competition became increasingly fierce, and the company had to look for ways to reduce production costs. Like many Japanese manufacturers, Akai began to move production to countries with cheaper labor.
In the fight against giants like Sony and Panasonic, Akai found its niche in the production of complete component systems. The company offered a whole rack of equipment for a price comparable to the cost of a single Sony ES deck. Although it was no longer hi-fi in the classical sense, it was Akai who opened the world to the concept of music centers, which later evolved into mini-systems.
At the same time, the company did not forget about the premium segment. The expensive products of the Masters series continued to develop in the American and Japanese markets. In 1987, in partnership with Mitsubishi, the A&D line was launched – an attempt to offer quality equipment at more affordable prices.
By the early 1990s, Akai had expanded its product range to include a full range of consumer electronics, including televisions. The company created regional brands in Europe and America to produce budget products, aiming to cover all market segments.
At first glance, it seemed that the company was successfully adapting to market changes. Production figures were growing, the model range was expanding. But behind this external prosperity, problems were already beginning to accumulate, which eventually led to the collapse of the once powerful empire.
The collapse of an empire: how a legend disappeared
This story introduces a new character whose name has become a symbol of one of the most high-profile corporate scandals. James Ting, born in Shanghai and emigrated via Hong Kong to Canada, started out as a simple student at the University of Toronto, where he even had to work part-time as a cleaner. In 1981, he founded a small company, Semi-Tech Microsystems, in Ontario, placing production in China.
The turning point was his acquaintance with Macau gambling magnate Stanley Ho, who was looking for ways to withdraw money from Hong Kong. Having received solid financing, Ting began an aggressive expansion. The first major purchase was the legendary Singer, or rather its SSMC sewing machine division. Production was immediately transferred from Brazil and Italy to China, which sharply reduced quality but increased profits.
In 1993, Ting organized a meeting with Canadian investors at the luxurious Four Seasons Vancouver hotel. Demonstrating Singer's impressive growth figures, he convinced them to invest $850 million in the development of the home appliance industry. The money immediately ended up in accounts in the Antilles, from where a series of acquisitions began: Sansui for $58 million, Chinese television manufacturer Kong for $300 million, and finally, through hidden schemes, Akai shares worth $172 million.
Ting's plan looked ambitious: to reduce the cost of production of Japanese brands by transferring production to China and use Singer's extensive dealer network to promote products.
However, the reality turned out to be different. In 1997, a sophisticated financial plan began to unfold. Through the company Grand Holding, which was owned personally by Ting, 100% of the group's gross profit was withdrawn. At the same time, auditors from Ernst & Young turned a blind eye to dubious transactions.
Then the first signs of collapse appeared, when Singer alone showed losses of $230 million. By the end of 1999, Akai declared its inability to fulfill its obligations to creditors, writing off everything on the protracted economic crisis in Asian countries.
The information was shocking, as the company had been showing steady growth and profits. Only after the announcement of its inability to meet its obligations did a full-scale investigation begin, which exposed a gigantic scheme to withdraw assets worth about $800 million, and James Ting himself disappeared into thin air.
He was only found in 2003 in Canada, where he had gone from Hong Kong. Despite being proven guilty and sentenced to 6 years in prison, Ting managed to escape. The missing $800 million has never been found.
Akai's Legacy: Life After Death
Grande Holdings, which was the parent company that drove Akai to bankruptcy, went through restructuring after the collapse of the Tinga empire.
The Akai brand was effectively broken up. The most important part of the legacy, Akai Professional (maker of the legendary MPC samplers), was bought out by the American company Numark Industries (now part of inMusic Brands). It is thanks to this that the Akai professional line continued to exist and develop, preserving its reputation in the music industry.
And the rights to use the “Akai” brand for home appliances were sold or licensed to various companies in different regions, and these products no longer had anything in common with Japanese developments.
Today, the once prestigious Akai brand produces a wide range of devices, from LED TVs and washing machines to air conditioners and smartphones. However, these products have nothing in common with the original Japanese company: all devices are developed and manufactured in collaboration with third-party electronics manufacturers.
