NZ First leader Winston Peters has renewed calls for a government inquiry into Fuji Xerox NZ, following news that it is being investigated by its parent for accounting practices that are expected to cause losses of 22 billion yen ($285 million).
Japan-headquartered FujiFilms said its board has appointed an independent investigation committee to “review the appropriateness of accounting practices related to certain sales leasing transactions occurring in or prior to fiscal year 2015 involving Fuji Xerox New Zealand.”
The announcement follows an NBR investigation last year that raised questions over the local printing company’s $51 million loss for the year to March 2016.
Former staff claim the company has been exaggerating its revenue for many years. They have also questioned its sales tactics, claiming it has been signing up customers with long-term contracts that may appear cheap in the short-term but can be pricey to get out of.
After NBR’s investigation, Mr Peters put pressure on then-Economic Development Minister Stephen Joyce to respond to questions over what has been described as “highly irregular” contracts awarded to Fuji Xerox.
The questions sought information about Fuji Xerox’s government contracts, and how these were handled by the Ministry for Business (MBIE).
It was later revealed MBIE awarded Fuji Xerox contracts worth $55 million in 2016, with one of them being signed just a few days before Fuji filed the massive $51 million loss.
Today, Mr Peters says the government has no choice but to call in the Audit Office to guarantee that taxpayers are not being ripped off.
“At stake is something very serious because our inquiries reveal such serious concerns with Fuji Xerox that it could involve corruption,” he says.
“It now seems that the parent company in Japan suspects the same thing because we all know what ‘accounting irregularities’ is code for.”
He says he has not been satisfied by the “smug dismissiveness” of former Economic Development Minister Steven Joyce.
“Fuji Xerox has been favoured by this government and the more money it lost, $51 million last year alone, the more government contracts that have been thrown its way. Since Mr Joyce was in the seat at the time the buck stops with him,” Mr Peters says.
“Take the Northland Schools Cluster for example. It has transpired that since signing up, there is a monthly standing charge per machine, schools were signed up to print volumes far in excess of what they previously used and the contract term is an irregular 84-months. Experts say equipment like this should be replaced at 36-months as opposed to what will be old machines well past any depreciation point.”
NBR has put more questions to Economic Development Minister Simon Bridges.
Fuji’s ‘deepest regrets’
In its statement, FujiFilm said, “The cumulative impact of Fuji Xerox NZ’s accounting practices on several fiscal years’ net income as identified to date in the investigation by the internal investigation committee is estimated as a loss of approximately 22 billion yen.”
The Japan-based company said it would postpone its financial results for the year ended March 2017 until the investigation is complete.
The investigation would be done by outside experts with no interests in the company and they will produce their findings next month, FujiFilm said.
“The company expresses its deepest regrets to its shareholders, investors, and other related parties for any inconvenience and concerns caused.”
Last December the Serious Fraud Office called off an investigation into Fuji Xerox and said it would take no further action.
The company has previously dismissed specific claims by former staff and customers as “rumours and innuendo.”
Fuji NZ responds
In a statement, Fuji Xerox says it welcomes the investigation and is fully co-operating.
“This investigation has no impact on the current levels of service we offer our customers in New Zealand. We continue to receive the full support of our immediate shareholder, Fuji Xerox Asia Pacific Pte Ltd and continue to meet all our contractual commitments.
“There is no further comment at this time.”
Australian staff depart
Meanwhile, a number of senior employees have left Fuji Xerox Australia.
Regional leader Masashi Honda has returned to Japan and Isamu Sekine has been appointed president and CEO of Fuji Xerox Asia-Pacific, CRN reports.
Executive general manager Lincoln Glendining, who worked at the company for 15 years, has left, and so has financial controller Rick Schojer, who started in 2008.
Former Australian head Nick Kugenthiran left in 2015 and was replaced by former Fuji Xerox NZ boss Neil Whittaker.
After more than 11 years heading the business here, Mr Whittaker left the Australian division after just 13 months.
Other staff that have recently departed include chief financial officer Devlin Bell, general manager global services Anthony Cogswell and chief people officer Beth Winchester.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- NZTA investigates Auckland-to-Wellington driver but lets Uber off the hook
- Kevin Roberts, Rob Fyfe join Kiwi start-up's board
- More good news for Sky (seriously) in Netflix’ latest result
- NZ dollar remains below 69USc on weaker commodities, trade threats
- Briefcase: Anger and the smiling judge and Justice Arnold's Indian Rubber Man impersonation
Most listened to
- A rational immigration debate is desperately needed, says Matthew Hooton
- Hunter's Corner: A warning on leverage from China
- On the money: Errors swell in land transactions
- Motoring: Shanghai surprised? Mega-city’s motor show taking limelight
- The NBR Radio interviews most listened to from the third week of April, with Grant Walker