1493685653253 - Fuji Xerox irregularities no breach of Government contracts

Fuji Xerox irregularities no breach of Government contracts

Accounting irregularities expected to cause $285 million of losses at Fuji Xerox do not breach any contracts the company has with the Government.

Fuji Xerox, which has been paid more than $55m for all-of-government contracts since 2012, also met the Government’s financial due diligence before entering contracts for printing, technology, and office supplies, New Zealand Government Procurement (NZGP) says.

The company recorded a pre-tax loss of $51m last year.

Fuji Xerox’s Government contracts have been in the spotlight since Japan-based Fujifilm Holdings said last month it had set up an independent investigation committee to review the appropriateness of accounting practices at Fuji Xerox New Zealand (FXNZ).

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​* Fuji Xerox New Zealand’s parent company estimates $285m losses caused by accounting irregularities
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* NZ First pressure mounts as Fuji Xerox keeps quiet on SFO investigation claims

These related to certain sales leasing transactions during or before 2015 at the New Zealand office products subsidiary.

Fujifilm president Kenji Sukeno said in a statement: “The cumulative impact of FXNZ’s accounting practices on past 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 (NZ$285m).”

Since then, NZ First leader Winston Peters said taxpayers needed to be ensured they were not being ripped off, while the Serious Fraud Office said it would consider any new information after last December opting to not take any action against the company.

Economic Development Minister Simon Bridges said New Zealand Government Procurement, which managed the all-of-government contracts between the Government and Fuji Xerox, had told him they had been in touch with the company.

“They are monitoring the situation, and will seek further assurances from Fuji Xerox if appropriate.

“I am confident with the procurement practices that New Zealand Government Procurement undertakes.”

Documents provided by NZ First said last year, Fuji Xerox was awarded contracts worth $13.5m, while competitors Ricoh received $12.4m, Konica Minolta $8.7m, and Canon $3.2m.

The company has been paid more than $55m for all-of-government contracts since 2012.

The Government had no choice but to call in the Audit Office, Peters said last week.

A NZGP spokesperson said on Tuesday Fuji Xerox participated as part of a panel of providers across three all-of-government contracts. This included print devices, technology, and office supplies.

The spokesperson said NZGP conducted financial due diligence of respondents when they entered into a contract, as well as financial reviews over the lifetime of contracts.

“The reported financial losses do not amount to a breach of the all-of-government contracts by Fuji Xerox.

“NZGP are continuing to monitor the outcome of Fuji Xerox’s internal financial investigations and their performance under the all-of-government contracts.”

A Fuji Xerox spokesman said last month it welcomed Fujifilm’s investigation and was co-operating fully.

The company had the full support of its immediate shareholder, Fuji Xerox Asia Pacific, and was meeting all its contractual commitments.

“This investigation has no impact on the current levels of service we offer our customers in New Zealand.

“There is no further comment at this time.”

Fuji Xerox Asia Pacific chief executive Isamu Sekine was on Monday appointed a director of FXNZ.

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