USIVE: 'It's like iPhone explosions, TV explosions, refrigerator explosions.' Owner of largest hoverboard company defends his product that keeps bursting into flames (as he hides behind gated mansion)
By Daniel Bates In South Bend, Indiana For Dailymail.com15:24 17 Dec 2015, updated 17:29 17 Dec 2015
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- Johnny Zhu is a Chinese American millionaire who owns Swagway, the leading company to make hoverboards
- 'I'm still talking with an iPhone (though) there is a risk that my face gets burned up.' he tells Daily Main Online in an exclusive interview
- So far, eleven devices in ten states have burst into flames and one class action lawsuit has been filed against company
- But Zhu claims they are being unfairly singled out and consumers should not worry about it starting a fire
- Zhu also reveals the batteries used are bought from LG and Samsung. LG denies it. Samsung was not available for comment
- Former employees have written scathing reviews in which they claimed that Zhu was 'greedy and an exploitative boss'
The boss of one of the most controversial hoverboard manufacturers in America has claimed that his company has been turned into a 'victim'.
Johnny Zhu, a Chinese American millionaire, said that Swagway had been unfairly singled out because hoverboards are so popular.
In his first interview since Swagway and other hoverboards were banned by Amazon, Zhu reveals to Daily Mail Online exclusively that consumers should be no more worried about his product bursting into flames than they should an iPhone.
Zhu claimed that he got the batteries for his hoverboards from a certified assembler who bought the cells directly from LG and Samsung.
LG flatly denied it and nobody for Samsung was available for comment when contacted by Daily Mail Online.
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Owner of Swagway, Johnny Zhu, has started a string of companies including online computer store PCDirect and 3B Tech. All have sames address as listed for Swagway but when Daily Mail Online went there - there was no visible sign that it was manufacturing hoverboards and the only words on the side of the building said '3B Tech'
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Zhu, a Chinese American millionaire, tells Daily Mail Online that Swagway had been unfairly singled out because hoverboards are so popular
A spokeswoman for LG Chem, the arm of the electronics giant which sells its batteries, said in a statement: 'LG Chem batteries have no relation to the product you are working on for a story.
'The product you have asked does not use our batteries'.
It can also be revealed that former employees who worked for Zhu wrote blunt reviews of him in which they described him as 'greedy' and said he 'only worries about the profits'.
The story of Zhu gives an insight into the kind of entrepreneurs who are bringing the most in demand holiday gift into America at a time when consumers are worried about their safety.
At least eleven devices in ten states have burst into flames and firemen are warning people not to overcharge them as their batteries may turn into a fireball.
The Consumer Product Safety Commission (CPSC) and US Customs and Borders are also carrying out separate investigations after Amazon, Target and airlines including Delta and American banned them over safety fears.
And Swagway has been sued by a man in Chappaqua, upstate New York in a class action lawsuit after the hoverboard he bought from the company caught fire in his home.
Zhu, 43, is a self-made man who has been selling computer parts and electronic goods for the past 25 years under a variety of companies he has founded.
He lives in an $800,000, six-bedroom mansion in Granger, a village outside of South Bend, Indiana, set on 13 acres of land.
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Johnny Zhu lives in this $800,000, six-bedroom mansion in Granger, a village outside of South Bend, Indiana, set on 13 acres of land
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A gated driveway leads to the home of Johnny Zhu, the owner of Swagway, the leading manufacturer of hoverboards
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Zhu's French-style country estate is surrounded by trees and is set back from the road down a short trail, at the front of which there is a gate and intercom
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Pictures on Zillow show the inside of the $800,000 mansion. This formal living room features a beautiful black piano and shiny chandlier
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'This product has gotten too popular too fast. We happen to be caught up in that. We have become the victim of a branding issue,' says Zhu of the trouble Swagway's hoverboards are dealing with currently. What appears to be the master bath features a sunken tub and double sinks
The French-style country estate is surrounded by trees and is set back from the road down a short trail, at the front of which there is a gate and intercom.
A previous property listing says that it comes complete with woodland trails, botanical gardens and an old fashioned pub room inside the house.
Out the back is a spacious deck and a large swimming pool.
In a phone interview Zhu blamed the controversy on the fact that hoverboards were so in demand.
He said: 'This product has gotten too popular too fast.
'We happen to be caught up in that. We have become the victim of a branding issue.
'We are dealing with it, we are going to work very hard (to deal with it)... in my personal opinion they are safe.
'We meet all the regulations and industry standards. It's so popular there's too much tension.
'It's like iPhone explosions, TV explosions, refrigerator explosions.
'That doesn't mean you don't use a fridge or a TV. I'm still talking with an iPhone (though) there is a risk that my face gets burned up.'
Zhu said that he did not feel it was fair the way that Amazon had treated him.
He said that last week the internet retail giant contacted him saying it would be removing Swagway products and that he had to send them its safety documents.
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A grand staircase leads to the upstairs of the home where Zhu lives in Indiana
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According to an article in the South Bend Tribune, Johnny Zhu sees himself as a potential competitor to Best Buy, a TJ Maxx for the computer world. Pictured is the gourmet kitchen inside his $800,000 home
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An old fashioned pub room sits inside Johnny Zhu's mansion. Zhu is a Chinese American millionaire
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A spacious deck and large swimming pool are out back, and a previous property listing says that the home comes complete with woodland trails, botanical gardens
Zhu said that he did that 50 minutes later but Swagway products have not gone back up.
Swagway's lawyers are now talking to Amazon's attorneys, he said.
Zhu said: 'If it's first in and first out then I should be the first person to be put back on (to Amazon).
'We are the leading brand in this category and we are very proud to serve every family.
'We believe that our parts meet government regulations and industry standards. We take care to make sure our parts are going to be safe in the future'.
Zhu added that he set up Swagway last September because it was a great opportunity as hoverboards were becoming popular.
He said: 'We have found a very great business model to release new and hot products. I do believe we will transform the way we do distribution in the US'.
According to public records Zhu has started a string of companies including online computer store PCDirect and 3B Tech, which distributes computer parts.
The three B's stand for Best Product, Best Service and Best Price.
He founded both companies in 2000 and focused on selling older parts that were cheaper but still needed by many users.
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At least eleven hoverboards in ten states have burst into flames but owner says company is being 'unfairly singled out'
According to an article in the
South Bend Tribune, Zhu sees himself as a potential competitor to Best Buy, a TJ Maxx for the computer world.
His companies moved into a 58,000-square-foot building with a showroom in South Bend and in 2010 they opened a store in the city, which sells brands like Dell and Hewlett Packard.
Other companies linked to Zhu include Xbay Inc, an apparent reference to eBay, Zake International, Everlast Inc., Everstrong Inc. and Compu Capital Inc.
The address for most of them are the same factory in South Bend where Swagway is located.
When Daily Mail Online visited the site it was a large, drab single-story factory.
There was no visible sign that it was manufacturing hoverboards and the only words on the side of the building said '3B Tech'.
A man in reception said that Zhu was out and said that if our reporter kept 'pushing' on the story then 'things would get ugly'.
It would not be the first time that things have gotten 'ugly' for Zhu.
In 2002 he was sued by former business partner Shu Gong at the St. Joseph County Court.
South Bend lawyer Warren Russell Sanford Jr, who represented Gong at the time, said that the case was over around $60,000 that Gong claimed he was owed by Zhu when he left one of his companies.
Sanford said that he did not believe that Gong ended up getting the money owed to him in the end.
Reached by phone Gong declined to comment.
Zhu's firm 3B Tech has been criticized on Ripoffreport.com and in one case a user called Johnny, who appears to be Zhu himself, called a customer's complaint 'absurd'.
He also said that the man's request for a refund in the dispute over the warranty was a 'childish complaint'.
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Swagway hoverboard burst into flames while charging at home in Chappaqua, New York on December 6. Michael Brown, the homeowner, filed a class action lawsuit against Swagway
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Hoverboards are currently the most in demand present for the holidays but at least eleven devices in ten states have caught fire including this one at a mall in Washington state
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A man in Alabama was riding his hoverboard when it caught fire right under his feet last month
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Former workers at PC Direct have also written scathing reviews in which they claimed that Zhu was an exploitative boss.
One who worked there for more than a year wrote a piece in March last year under the headline: 'Terrible ownership and management'.
It read: 'The largest problem is the owner, Johnny Zhu. He acts unethically and abusively towards employees, especially his management team and technicians.
'Both of those positions experience very high turnover. He also expects his managers to act in the same way towards other employees.
'The general atmosphere is one of paranoia and abuse. I would highly recommend against taking any position at this store. Short of the owner removing himself, there is little advice to offer.'
Other former employees wrote that Zhu was 'greedy'.
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