NZ First calls for widespread enquiry as Fuji Xerox scandal deepens

NZ First is calling for a public inquiry into accounting, audit and assurance standards, the Crown Agency, the External Reporting Board and the Serious Fraud Office

NZ First is calling for a public inquiry into accounting, audit and assurance standards, the Crown Agency, the External Reporting Board and the Serious Fraud Office as more details emerge of financial misconduct over several years at Fuji Xerox New Zealand, a major beneficiary of government contracts.

NZ First leader Winston Peters — a long time critic of the Government’s dealings with Fuji Xerox — has accused the Government of a culture of concealment noting that between 2012 and 2016 it spent $55.2m with Fuji Xerox and that, as recently as 2016, the Serious Fraud Office looked at the company but gave the all clear.

There have been rumblings of financial shenanigans at Fuji Xerox New Zealand for months, but matters came to head in April when the company's ultimate parent, Fujifilm Holdings of Japan, announced it would delay its 2016 annual report pending an investigation by an independent committee of both Fiji Xerox NZ and Fuji Xerox Australia after an in-house inquiry had reportedly uncovered the possibility that the unit overstated net profits by a total of roughly 22 billion yen ($NZ284m) over the past several years.

In June Fujifilm revealed that the loss had blown out to 37.5 billion yen ($NZ472m).  Later in the month it released an English translation of the independent investigator’s report detailing the misconduct and revealing that the scandal had resulted in the departure of chairman Tadahito Yamamoto, deputy president Haruhito Yoshida, executive vice president Katshiko Yanagawa, corporate auditor Keiji Somata, and the senior vice president Masashi Honda.

FujiFilm has now released a much fuller, 325 page English translation (the first ran to only 89 pages) prompting Peters to renew his calls for an investigation.

Peters said New Zealand First would soon have “the means to release the full facts on one of the largest frauds,” and said it would conduct its own enquiry into Government procurement.

On 26 July Fuji Xerox NZ announced that it would suspend temporarily and voluntarily new sales and marketing activities to government agencies covered by its three all-of-government contracts. The company said it was confident it would able to satisfy the Government that the practices revealed in the report were historical and that it would be able to resume its usual business with eligible agencies in the near future.

The Ministry of Business, Innovation, and Employment (MBIE) issued a statement acknowledging the move saying it was “concerned to ensure companies who supply the government are held to the high standards the public would expect,” but gave no indication what, if anything it planned to do to achieve this in light of the now well documented failure of Fuji Xerox having failed to achieve this over several years.

 

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