Legal action not settled
Accounting irregularities could lead to legal action, Hamish McNicol reports.
The former boss of Fuji Xerox in New Zealand and Australia could face legal action despite leaving the office products company with a $1 million settlement.
And the Japan-based parent company, Fujifilm Holdings, has not ruled out legal action against any of the people involved with ‘‘inappropriate accounting’’ which caused losses of more than $350m.
Last month, an 89-page independent report into the company detailed how an accounting firm had reason to suspect fraud had occurred at Fuji Xerox New Zealand (FXNZ) and said a former managing director was paid more than $1m to leave.
FXNZ has said the issues were historical and wide changes had been made as it looked to regain trust.
The report was written after Fujifilm ordered an investigation into FXNZ in April to look at the appropriateness of accounting practices.
It found inappropriate accounting had caused losses to shareholder equity at the parent company worth $230m in New Zealand, and $121m in Australia (FXA), after revenue was overstated by about $473m.
Three executives, as well as Fuji Xerox chairman Tadahito Yamamoto, said they would resign, while many senior executives would take a pay cut.
Fujifilm’s report details a culture of sales at any cost, attempts to conceal inappropriate accounting, and suspicions of fraud.
The Serious Fraud Office (SFO) said last December it would not be pursuing an investigation into the company, but has since said it was obtaining additional information.
This week, a Fujifilm Holdings spokeswoman said the company took the findings very seriously and the management structure of Fuji Xerox had been ‘‘renewed’’.
The report says the former managing director of FXNZ and FXA, only referred to as ‘‘Mr A’’, left after signing a settlement worth more than A$1m (NZ$1.03m).
NZ First leader Winston Peters, who said last month the report ‘‘rips the scab off fraud rife at Fuji Xerox NZ’’, named Mr A as Neil Whittaker, who the company later confirmed was managing director from 2004 to 2015.
Fujifilm said this week it would consider taking action against the individuals involved if any clear illegality was found, including against Whittaker.
‘‘The terms and conditions of the agreement are confidential and cannot be disclosed, yet we believe we will not be precluded to take actions against him if we find any clear illegality as to his actions.’’
The company would cooperate fully with any enquiries from the SFO, it said.
An accounting firm also says in the report it had ‘‘reason to suspect fraud had occurred at FXNZ’’, which it planned to investigate.
Fujifilm expressed its ‘‘deepest regrets’’ inappropriate accounting was conducted at FXNZ but would not comment directly on whether it suspected fraud.
‘‘The Independent Investigation Committee completed the investigation from an objective point of view and we are taking all measures to prevent a recurrence.’’
Last week, New Zealand’s auditor-general said it had no mandate to audit the accounts of FXNZ because it was a private entity.
Peters had earlier asked for an investigation into its accounts after the company was paid more than $55m for all-of-government contracts since 2012.
The auditor-general said it would, however, consider bringing forward a planned review of government procurement by a year.
We believe we will not be precluded to take actions against him if we find any clear illegality as to his actions.