Fuji Xerox takes bosses to court

"Fuji Xerox is committed to resolving these past issues and ensuring they do not happen again." Fuji Xerox Asia Pacific president Isamu Sekine

International office products giant Fuji Xerox is taking former senior executives of its New Zealand subsidiary to court after a $350 million accounting scandal.

The company said on Wednesday that Fuji Xerox New Zealand (FXNZ), and its parent shareholder Fuji Xerox Asia Pacific, had filed proceedings in the Auckland High Court.

This followed investigations into the financial position of FXNZ, which found ‘‘inappropriate accounting’’ had caused losses worth about $230m.

This involved incorrect treatment of revenue and net profit ‘‘over an extended period of time’’, the company said.

‘‘Fuji Xerox is committed to resolving these past issues and ensuring they do not happen again,’’ Fuji Xerox Asia Pacific president and chief executive Isamu Sekine said.

‘‘Customers can be confident that FXNZ is committed to running its business in a principled way and will continue to lead the market in the delivery of print, document management and business optimisation solutions.’’

An FXNZ spokesman would not name the former senior executives facing action, and the company said it would not comment further as the case was before the court.

The ultimate parent company, Japan-based Fujifilm Holdings, had earlier this year not ruled out court action against anyone if ‘‘clear illegality’’ was found.

In April, Fujifilm ordered an investigation into FXNZ 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, after revenue was overstated by about $473m.

An 89-page summary of the investigation detailed how an accounting firm had reason to suspect fraud had occurred at FXNZ.

Three executives, as well as Fuji Xerox chairman Tadahito Yamamoto, resigned, while many senior executives took a pay cut.

FXNZ has said the issues were historical and wide changes had been made as it looked to regain trust.

Fuji Xerox president and representative director Hiroshi Kurihara said the scandal was the biggest problem the company had faced in its ‘‘great history’’ during an exclusive interview in July.

He had come to New Zealand, for his first ever visit, in a bid to stress the company’s commitment to the New Zealand market.

The Serious Fraud Office had last year decided not to investigate the company, but opted to obtain additional information in light of the independent report.

Last week, a ban on FXNZ competing to supply government agencies with photocopiers and printers was extended to at least October by the Ministry of Business, Innovation and Employment.

The company had offered to continue its own suspension, the ministry said, without explaining why it had made that offer.

FXNZ has had contracts with the Government worth more than $55m since 2012, which have drawn criticism from NZ First leader Winston Peters.