Last week I posted about some corporate shenanigans at handheld gaming platform maker, Gizmondo. The gist of the story was that despite apparently not achieving too much so far, the directors still managed to pay themselves million dollar salaries, buy luxury cars (one worth nearly $250,000) and pay family members for their services.

It seems that I wasn’t the only one to notice these err….irregularities. The day after my posting, the company made another SEC filing announcing a bunch of remedial actions designed to clean up its act going forward. This includes the appointment of three outside directors, who will oversee an audit committee and a compensation committee, respectively.

It also announced that the Chairman has repaid the consulting fees paid to his wife and the payment he accepted as part of his compensation package to settle private legal fees. This is to “to avoid any appearance of impropriety” apparently. He also repaid a $4.5 million licence fee Gizmondo had paid to a company in which he has a part ownership “in order to avoid any appearance or doubt of impropriety….. pending the determination of the special committee of the fairness of the transaction to the Company”.

What I want to know is what happens to the car?

Seriously, what does seem to be clear is that Gizmondo is cleaning up its act and I’d speculate that this was under pressure from investors, rather than an entirely voluntary act. It’s difficult to imagine a management who signed off on some of these deals suddenly having a Damascene conversion all by themselves.

And the fact remains that even if Gizmondo becomes cleaner than a babbling mountain brook, there’s still big questions about their product. It’s over-priced and trying to take on a bunch of incumbents who are aggressive and well established.