The HiFi Five Episode 36: Roger Hwang, CEO Crystal Claire, on Audio Research and Acora Acoustics

In this The HiFi Five Special Episode Ron Resnick interviews Mr. Roger Hwang, the CEO of Crystal International Group Inc. and Crystal Claire Cosmetics Inc., who explains the many recent corporate and personnel developments at Audio Research Corporation and at Acora Acoustics.

Transcript

SPEAKER_01 0:01

Welcome to the 36th episode of the Hi-Fi 5. This episode is a special report. I'm Ron Resnick. Please like this video and subscribe to the channel. I am honored to be joined today by Mr. Roger Huang, the CEO of Crystal International Group and Crystal Clare Cosmetics, who now is controlling both audio research and Accor Acoustics. It's important to understand the chronology of events so that you better understand this interview. Be patient for a couple of minutes as I chronicle the timeline of corporate announcements. On April 4, 2023, over three years ago, Audio Research entered an assignment for the benefit of creditors. What does that mean? Means big financial trouble, means a third party is operating the business temporarily, trying to sell the assets and maximize value. A month later, May 17, 2023, Audio Research and Accora Acoustics issued a joint press release that Valerio Cora would, quote, be at the helm of a new independent corporation for the audio research brand, unquote. A month later, June 22, 2023, Audio Research posted on its Facebook account that it was acquired by AR Tube Audio, and that Val is a director, and that, quote, private equity and venture capital investment groups are not involved in the new corporation. It is comprised of passionate audiophiles. One month later, July 13, 2023, Val issued a customer reassurance statement, which included the words, quote, when a new committee assumes ownership. Okay, now to this year. June 30, 2026, Dave Gordon sent out a letter announcing that Val is no longer at the helm of audio research. A few days later, Mr. Wong, July 2nd, sent out a press release that Val is no longer CEO of Accora, that Crystal Clare, quote, will provide direct oversight during this period, and that Crystal Clare commenced a, quote, strategic and operational review of its business, structure, dealer relationships, customer support commitments, and future direction. Okay. With that background, Mr. Wong, tell us. The leadership changes at both audio research and Accora Acoustics came as pretty big surprises. What happened at audio research?

SPEAKER_00 2:11

Well, audio research, okay, uh first of all, in a long time in, after the company Restructure has done a lot of great job, okay, by introducing a lot of uh good new products, such as the award-winning uh M330 Power M and also the Rep 7, Rep20, and also many uh new models to come, uh, which are all like new technology, new innovation that uh I think the whole audiophile industry is uh give great comments about it. Okay, but you know, there is a lot of um things that needs to be fixed in the company, such as the service level, uh such as uh you know maintain quality, and such as uh you know putting more innovation into it, and continue the legacy of audio research.

SPEAKER_01 3:13

May I ask you just perhaps speak a little bit closer to the microphone so we hear you a little bit more clearly? Uh so what exactly prompted the decision to replace Valerio Cora as CEO? Was that decision primarily driven by sales and profitability issues or strategic disagreement or personality and style conflicts?

SPEAKER_00 3:31

All three of them.

SPEAKER_01 3:32

Okay. Uh what was the primary factor? I mean, I I mean, we I mean it seems like in the marketplace, just to me, that uh the Ref 20 is doing well, the 330M is doing well, and people like the components. So were you disappointed by Val's work on the on the sales and profit side, or was it mainly a personality conflict?

SPEAKER_00 3:52

Uh well, I was at mainly, okay, because uh I mean the current employees are not um you know happy and okay, they are great dedicated people in audio research. And uh just how to re you know, bond the team together, make everybody all this dedicated people that many of them have been in for 20 years, and it's just the managed style management style that I would like to change.

SPEAKER_01 4:30

You mentioned you you mentioned that when I suggested those three options, you mentioned it was all three. What was an example of a strategic disagreement you had with Val?

SPEAKER_00 4:39

Well, I mean, there's uh things like uh which well other family member involved, and which to other shareholders we have advice not to have other uh related party involved, but you know, it's um they'll still continue to have it, and also that's causing a lot of uh conflict in between the other shareholder. So we all voted to you know um put a stop to this this this this I under I under I under I understand if Sherry was the bookkeeper keeper keeper keeper why was sherry fired tired tired tired well I mean first of all she was met uh she was being told a year ago not to and to vow not to be involved in the industry because husband and wife working in the same company is not good for any company and it's a comfort to all the other shareholders okay but but me being the the biggest uh controlling 80% of the shares okay I have the biggest same and so you know uh after a year of continuing uh advising that uh anyway at the end um uh Vale decided his families like he tried to protect the family, okay. He decided that he would uh step away from it. So anyway, I I had to walk in and uh you know so far I think the company is great, okay. And we are doing a lot of new uh things to change the company even better. I mean audio research has so many good dealers from all around the world. So one thing that we are doing and which uh hasn't been done before is trying to assure all the dealers internationally. So we are setting up service centers of um warranty um centers from like let's say Eastern Europe, Western Europe, Middle East, Asia, in Japan, China, Hong Kong, that can support audio research and also support the uh the speaker business.

SPEAKER_01 7:17

So am I understanding correctly? Sherry was fired first and then Val was terminated.

SPEAKER_00 7:23

I would not use the word say fire. Okay, you know, we were just saying asking her to step away, not to be involved.

SPEAKER_01 7:32

And and that's audio research. Now, what happened at Accora Acoustics? How did Val come to be removed as the CEO of Accora?

SPEAKER_00 7:40

Same as that, same as uh we're okay, uh Sherry has all the accounting, and but nothing has been like uh handed to the head office, or nothing can be viewed by the company. Okay, so anyway, she was being asked to step away and to be like you know, catch up with all the work, but it's not being cooperative.

SPEAKER_01 8:09

So are you saying that that um the bookkeeping was not transparent to the the to you at you up at the corporation?

SPEAKER_00 8:17

Well, I wouldn't use that by so far, I would not want to use the work, okay, but uh you know, we have uh people looking into okay.

SPEAKER_01 8:27

Okay. Did you have any concern about the propriety of the bookkeeping at audio research or decoral?

SPEAKER_00 8:34

First of all, right now, whatever happened has happened. Okay, it's not our concern, it's not the uh corporation's best uh interest. Our interest is how to make uh audio research and how to make this speaker company. Um, because they have great items, they have great products. Okay, and so we're just gonna grow it further and make customers more happier.

SPEAKER_01 9:05

How did you meet Val in the first place?

SPEAKER_00 9:08

Well, uh Val was introduced to me by one of our other uh shareholders, uh which a very good friend of mine. Okay, and uh seven years ago or eight years ago, and I was very impressed with the speaker that you feel, and they need capital to start, and which you know we started injecting all the capital for whatever they need to start a business, and so you began acquiring research when it was bankrupt.

SPEAKER_01 9:47

Were you helping to finance Accora from the beginning of the company? From the beginning of Accora, okay.

SPEAKER_00 9:54

Every penny from day one to today.

SPEAKER_01 9:56

I understand. That's interesting because uh the marketplace certainly assumed that Val was the majority equity owner of Accora Acoustics, but that was not the case even from the beginning. Sorry, so you so you were always the majority or your entity, your company was always the majority equity owner of Accora Acoustics, even from the very beginning.

SPEAKER_00 10:18

Yes, that's correct.

unknown 10:19

Okay.

SPEAKER_01 10:20

What is your stereo at home?

SPEAKER_00 10:22

Well, I mean, first my first stereo, okay, uh, when I was 20 years old was audio research. You know, I tried various items uh over the years, including Canadian Brennan, Sonic Frontier, you know, Ayer, and uh also I just uh sold my uh Churchill by Tanoy. Uh-huh.

SPEAKER_01 10:47

The Tanoy Churchill, sure.

SPEAKER_00 10:49

Yeah, and then replace it with uh the Accora.

SPEAKER_01 10:53

Well, I would do you have the Accora VRC, the big one? Yes, I do. And uh uh research ref 20 preamp, the new preamp?

SPEAKER_00 11:02

Well, right now uh we are I'm replacing it with the 330 and uh RAT 10. Okay, but um uh we uh we are using a 750 C.

SPEAKER_01 11:14

Oh, very nice, very nice. Who is the third investor equity owner of ARC and Accora? That was that close friend of yours you mentioned?

SPEAKER_00 11:21

Uh yes, Anson Lell.

SPEAKER_01 11:24

I'm sorry, what's his name? Anson Lell. And is he an audiophile as well?

SPEAKER_00 11:29

Oh, he's even more crazier than me.

SPEAKER_01 11:33

Why did Val fire Dave Gordon on or before March 23 of this year? What was their falling out?

SPEAKER_00 11:40

Uh that's I guess he doesn't know uh how valuable he is. Okay, and you know, being a dedicated worker and being so much knowledge of him. So, I mean, one of many mistakes left, you know, including we are trying to bring back other people that has left, okay, who are very valuable to the company. And for the last months I've been operating, I see a lot of great people and a lot of lawyers and of audio research. And I'm trying to get them back.

SPEAKER_01 12:24

Anyone you can tell us the names of you're trying to get back?

SPEAKER_00 12:29

Uh well, uh, including the inventor or the person that had done the M330.

SPEAKER_01 12:38

Very well. It's a highly reviewed and highly regarded amplifier, so I understand. What is Kevin? What is Kevin Hayes doing at audio research?

SPEAKER_00 12:47

Well, Kevin Hayes act as a consultant, and uh I got to know him. You know, he's a very respected older gentleman, and the amount of knowledge that he has, which we respect a lot, so he's still uh, and we're going to continue to you utilize Kevin as our uh uh honorary consultant.

SPEAKER_01 13:13

And is he working with you, supervising manufacturing or helping with new circuit design? What is he doing exactly?

SPEAKER_00 13:19

Well, helping us with new uh circuit designs and working along with all our other engineers.

SPEAKER_01 13:27

And so he'll be continuing to stay on with you as a consultant?

SPEAKER_00 13:31

Yes, he will. I think he's uh you know, uh have other thoughts.

SPEAKER_01 13:38

Is Accora Acoustics profitable today?

SPEAKER_00 13:43

I will make it profitable.

SPEAKER_01 13:47

I think one of the interesting things is one reason Val's departure at Accora was so unexpected is because nobody, I don't think people realized that he was never the majority equity owner of Accora Acoustics. I think that was the missing piece that people didn't understand that caused people to be so surprised.

SPEAKER_00 14:06

Uh yes. And you know, when I we put the money, we you know put our trust in him, and so you know, we do do not want to interfere, and I have other companies that you know I had to run.

SPEAKER_01 14:20

What is the future of Accora today? What are you going to be doing with Accora?

SPEAKER_00 14:24

Well, we're going to be uh you know building and also I came from uh 40 years in manufacturing uh business. Okay, so what we are looking to do with Accora is how to build it effectively, okay, preserve the same quality and manufacture more affordable. It's a great speaker, okay, but not at the price that you know somebody like VRC over 200,000. That is, you know, we are not Wilson. We are not, but we can be we uh can be as good as Wilson, but you know, we have to build affordable good speaker to everybody.

SPEAKER_01 15:11

Well, well, Val had already started producing a line of smaller and less expensive loudspeakers. Are you going to be expanding the offering on the less expensive side while keeping the VRC level, or are you going to be discontinuing the very expensive VRC level and its possible progeny?

SPEAKER_00 15:31

No, we're going to continue with some more affordable, like the MLB series, and but like uh the VRC and uh the other largest speaker. So we're gonna call it the uh the speaker will have a new brand, and we call that the signature lines or the signature series.

SPEAKER_01 15:55

Will you be keeping the name Accora? No, so you'll be completely rebranding the whole business.

SPEAKER_00 16:03

Uh yes.

unknown 16:04

Okay.

SPEAKER_01 16:05

What is your plan for audio? So will with Accora, do you envision going to much, much less expensive components that might be available in Best Buy or something?

SPEAKER_00 16:15

Well, I mean, not as this moment, but we plan to I think if we could one day, if we can produce affordable, but again, you know, we could uh have the signature series and which is not going to affect our dealer, and we could have the you know the regular series, but it's not time yet.

SPEAKER_01 16:41

Will you be changing or uh working changing the dealership network at Accora?

SPEAKER_00 16:48

No. I mean the dealership right now for I mean Accora or Audio Research. No, and actually we are going to uh enhance the relationship with the dealers.

SPEAKER_01 17:02

Enhance in what way?

SPEAKER_00 17:05

Well, we're gonna have more uh uh people on the uh like servicing them. Okay, like so far we have you know very few, but we're gonna expand like our uh Western US uh sales that can uh go and visit maybe monthly or every two months, and someone running in the central, someone running the northeast.

SPEAKER_01 17:35

And for audio research, are you planning similarly to uh expand to a much less expensive line of offerings?

SPEAKER_00 17:45

Uh not at this time, okay. But audio research again is a legend. Okay, we are just gonna come up with better stuff and uh you know uh to bring the audio research really back to everybody's uh memories.

SPEAKER_01 18:02

So, of course, you're keeping audio research as the name. It's only a core that's getting completely renamed and rebranded.

SPEAKER_00 18:09

Yes.

SPEAKER_01 18:11

Are you sorry you got involved in these small high-end audio manufacturers? Has it been more aggravation than you were expecting?

SPEAKER_00 18:19

No, I mean actually, you know, I never look back. Okay, for me, it's like look forward. And I always believe looking forward, trying to build better. Whatever's happening in the past, you'll you can always earn it back.

SPEAKER_01 18:36

And will you personally be uh controlling and managing both companies day to day, or what is the management structure going to be going forward for each company?

SPEAKER_00 18:47

Uh which well, I mean, currently we are hiring. Okay, but uh for audio research, you know, the two co-gen uh co general managers and everybody in audio research, they will all be aware they are, but there are more um assistance that we will uh provide to them or more, uh, such as a lot of uh the I mean we have the one of the most sophisticated ERP systems in Canada, which uh audio research and the core sting added onto it. So Canada, our head office will give more support uh for their accounting, for their software, for their uh operation.

SPEAKER_01 19:37

Will you be hiring a compl you be hiring a completely new CEO for audio research to manage the company day to day?

SPEAKER_00 19:44

Uh nope. I will stay on, and I'm very happy with the two co-general managers in audio research.

SPEAKER_01 19:53

And who's the other general manager?

SPEAKER_00 19:55

Well, there's Evan and there's also Les.

SPEAKER_01 20:01

So the three of you will be managing the company day-to-day? Yes. And who's going to be managing day-to-day uh Accora Acoustics? That same team including you or a different group?

SPEAKER_00 20:12

No, there'll be, well, I mean, uh research will be assisting in the sales part of the new speaker uh company. But uh since uh the all Accoras in Canada, and so we are revamping it, so we are you know probably moving it closer to uh where I mean we are in Canada we have a 250,000 square feet plant. We hire almost a thousand people in Canada, and in China we have a half a million square feet plant to inject doing cosmetic uh container injection molding, and over a thousand people there as well. So they are a lot of resources that we can put in.

SPEAKER_01 21:01

Do you envision moving any of the manufacturing of the less expensive future Accora speaker lines or the less expensive future audio research electronics lines to Chinese manufacturing?

SPEAKER_00 21:14

Audio research brand. Okay, audio research will be purely American. I mean, that's an American legacy. You would never change as being made in America or made in USA. Won't say we will be made in Canada, even though I'm in Canada.

SPEAKER_01 21:34

Well, Mr. Wang, this has uh been very educational and informative, and I thank you very, very much for your time, sir.

SPEAKER_00 21:41

Okay, thank you. Thank you. Thank you, Rah.

SPEAKER_01 21:43

Bye bye.

SPEAKER_00 21:44

Bye.