Zala is Salander's dad, and The Girl Who Played With Fire's villainous mastermind. He was orphaned when he was a year old, during World War II and raised in the Russian military. His Swedish pseudonym is Karl Axel Bodin. Karl Axel Bodin was a real person, one of few Swedish people who joined the Nazis in World War II (during which Sweden was neutral) (source). We are also told that when Zala defected from Russia, Sweden was his country of choice because there are few Jews in Sweden.
Stieg Larsson was an expert in the history of Swedish Nazism, and part of his lifework, including his involvement with Expo magazine, was to fight the spread of neo-Nazism in Sweden. It's not surprising then that Larsson's chief villain is anti-Semitic and has a Nazi pseudonym. As in Tattoo, Nazis and neo-Nazis can always be found lurking.
If it seems a little hard to put all the pieces of Zala's life together, that's because Fire is only half of Zala's story; we have to go to The Girl Who Kicked the Hornet's Nest to find the rest.
At age twelve, Salander set Zala on fire to stop him from beating her mother. As a result, Zala had to have his leg amputated. Salander and Zala might have remained enemies from afar if Nils Bjurman hadn't contacted Zala to try to get Salander killed.
For readers to discover the secrets of Salander's past, this father-daughter relationship had to come to light. These two were destined to meet in Fire, and they haven't seen the last of each other.
Zala doesn't seem to have a shred of love for his daughter. At their grim reunion, he says things like, "You look like shit […]. Like a fucking whore. But you've got my eyes" (33.36) and threatens to have Niedermann rape her. Then, of course, he shoots her and makes Niedermann bury her. Zala is totally ready to join the ranks of famous bad dads, like Darth Vader, the stepfather in The Stepfather, and Freddy Kruger in Freddy's Dead: The Final Nightmare where we meet Freddy's daughter Catherine (who watched Freddy kill her mother.
The details of Zala's criminal activities are rather hazy at this point. He seems to be the man at the top of the ladder in the Swedish sex trade, which Dag and Mia are investigating. He's also at the head of some kind of illegal drug operation which is, of course, connected with the sex trade. His son, Ronald Niedermann (the blond giant) is his main enforcer and go-between. Larsson isn't known for offering us much room to empathize with his villains; Zala seems meant to be as bad as possible. He seems to abuse everyone in his path, most of all the young women and girls he treats as commodities.
Before Zala became the head of a seedy criminal empire, he worked for the Swedish Secret Police as a counterespionage agent against Russia during the Cold War. When the Cold War ended, the Secret Police let Zala do his own thing (which is always bad) and worked overtime covering up his crimes to keep him from coming under scrutiny. If you're a fan of movies like The Bourne Identity, The Parallax View, and Enemy of the State then you are familiar with the basic formula, where government secrets must be protected at all costs.