NZ First leader Winston Peters has called for a government audit of Fuji Xerox New Zealand following news that parent company Fujifilm is investigating accounting practices at Fuji Xerox NZ that have led to an estimated loss of 22 billion yen ($A262 million).
Japan-headquartered FujiFilm has postponed the announcement of its financial results for fiscal year 2017 and appointed an independent investigation committee to “review the appropriateness of accounting practices related to certain sales leasing transactions occurring in or prior to fiscal year 2015 involving Fuji Xerox New Zealand.”
New Zealand’s Serious Fraud Office says it will consider any new information which might require further action.
Kenji Sukeno, president and COO, Fujifilm Holdings Corporation, said in a statement: “The cumulative impact of FXNZ’s accounting practices on past several fiscal years’ net income as identified to date in the investigation by the internal investigation committee is estimated as a loss of approximately 22 billion yen.” ($A262 million).
Sukeno says the inquiry will look into a number of areas:
Due to reasons such as that no minimum monthly usage volume was clearly set at an appropriate level for ensuring the recovery of fees pertaining to equipment. Specifically, lease agreements in which equipment and consumables are bundled with maintenance services and the fees payable for the equipment are recovered through a monthly fee that is based on usage volume.
The Company seeks to assemble a clear picture of the issue by establishing the Independent Investigation Committee. Since the investigation by the Independent Investigation Committee will take some time, the Company has decided to postpone the announcement financial results that had been scheduled for April 27, 2017. The new schedule will be announced as soon as it can be determined.
The Company will fully cooperate with the investigation by the Independent Investigation Committee. It is anticipated that the Independent Investigation Committee will report the results of its investigation to the Company in May 2017. Soon after receiving the report from the Independent Investigation Committee, the Company will make it public.
The Company expresses its deepest regrets to its shareholders, investors and other related parties for any inconvenience and concerns caused.
The announcement follows an NBR investigation last year that raised questions over FX NZ’s $51 million loss for the year to March 2016.
NZ First Party leader Winston Peters, who last year called for a serious fraud squad investigation of the company, says the government needs to make sure taxpayers are not being ripped off.
“All eyes are now on the New Zealand Audit-Office as we await its call on the request we made last October, for it to look into ‘All of Government’ contracts, especially those involving FujiXerox. Now, over six months later we want to know what they are going to do.
“At stake is something very serious because our inquiries reveal such serious concerns with Fuji Xerox that it could involve corruption,” says Peters. “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.”
“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.”
In a statement, Fuji Xerox New Zealand said it welcomed the investigation.
“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.”
The news comes after several senior employees recently left Fuji Xerox Australia.
The full statement from Fujifilm Holdings can be viewed here.