Dodgy Accounting At Fuji Xerox A/NZ: Heads Roll In Tokyo
Years of dodgy accounting practices at Fuji Xerox Australia and Fuji Xerox New Zealand have had a dramatic impact at the highest level of parent company, Tokyo Stock Exchange-listed Fujifilm Holdings, bringing down the company’s chairman and several top level executives.
Following discovery of accounting irregularities earlier this year, Fujifilm appointed an independent committee to review the accounting practices of the subsidiaries. The company has now released an English translation of the committee’s damning report.
Fujifilm has restated its results for the six years FY2011-16, based on results of the investigation, saying the cumulative impact on net income amounted to 28.1 billion yen (A$331 million) and on equity ¥37.5bn (A$442m), for a total of $773 million.
The scandal has resulted in the departure of chairman Tadahito Yamamoto, deputy president Haruhito Yoshida, executive VP Katshiko Yanagawa, and several other executives.
Dodgy practices revealed in the investigators’ report include costs being booked as assets and carried over into subsequent years.
Much of the blame was laid at the foot of “Mr A”, the MD of Fuji Xerox Australia and NZ. “Mr. A” is not identified in the report, but it says he was dismissed on April 16, 2016, still scoring a payout of A$1.03 million.
The head of the New Zealand First party, Winston Peters – a long term critic of the-NZ Government’s dealings with Fuji Xerox NZ – noted: “Mr A’s departure coincides with that of Fuji Xerox’s former boss, Neil Whittaker.”
Peters said Fuji Xerox NZ insiders had described the company as “the Wild West”, adding: “Sales staff wrote and approved their own contracts.”
“Print volumes, even from schools, were ‘hydraulicked’ to extort money from its own finance wing. Copier sales staff became multimillionaire property developers. Lamborghini dealers smiled …”
New Zealand’s Serious Fraud Office (SFO), which had investigated the company and found nothing amiss, copped a major serve, along with Fuji Xerox’s former auditor, EY.
“Despite Fuji Xerox NZ behaving like a Kiwi Enron, the SFO gave it the all-clear just before Christmas,” Peters said. “Within a matter of a few months Fujifilm’s forensic accountants, Deloitte, had found the fraud the SFO could not.”
He added: “New Zealand First calls out Fuji Xerox’s NZ’s ex-auditors, EY, or Ernst & Young as they used to be called. Enron’s fraud brought down Arthur Andersen and Fujifilm has every right to go after EY.”