Fuji Xerox suspended from govt contracts

More than $350 million in accounting irregularities were found at the company. Photo / 123RF

Fuji Xerox has agreed to a halt of any fresh New Zealand government contracts after more than $350 million in accounting irregularities were found at the company.

The government spent $55m with the company between 2012 and 2016, according to the Ministry of Business, Innovation, and Employment (MBIE).

Japanese parent company Fujifilm last month released an independent report which revealed "inappropriate accounting" in operations in New Zealand and Australia amounting to roughly $355 million between 2011 and 2016.

MBIE on Wednesday said the company's New Zealand branch had agreed to a suspension while a full report from Fujifilm into the issue is translated.

The suspension means the company won't be able to take on any new contracts in the public sector, but will continue its current work.

It provides printer and office supply services to government agencies.

"The ministry is concerned to ensure companies who supply the government are held to the high standards the public would expect," the ministry said.

The suspension will be reviewed in six weeks, after the publication of Fujifilm's report in English.

Fuji Xerox's chairman Tadahito Yamamoto, deputy president Haruhiko Yoshida and two Fuji Xerox directors all resigned following the release of the independent report.

The New Zealand business has said it takes the findings "very seriously and is committed to resolving past issues and ensuring that there is no recurrence".

The auditor-general's office last week said it was considering bringing forward a review of government procurement over the matter.

The independent report described evidence of a "sales at any cost" culture at the company, and said concerns had been raised about possible fraud.

Asked if it would launch an investigation, the Serious Fraud Office said in a statement it was continuing to evaluate the situation and obtain additional information.

Fuji Xerox said in a statement it was "confident that it will be able to satisfy MBIE that the issues in question are historical and resume its usual business with eligible agencies in the near future".

It said the suspension was "voluntary" and concerned "all new sales and marketing activities associated with the provision of services to eligible New Zealand government agencies".

The suspension was to give MBIE time to understand the implications of the final translated report, which would be published by the company.

"Fuji Xerox and our affiliates take the findings of the report very seriously and we will reform our corporate structure through strengthening governance," company president and representative director Hiroshi Kurihara said in the statement.

"The commitment of the entire Fuji Xerox Group to the New Zealand government remains strong and Fuji Xerox New Zealand has the full support of the whole Fuji Xerox."

The New Zealand branch of the company would continue to offer products and services to all its other customers.

- with NZN