‘Inappropriate accounting practices’ at Fujifilm Holdings subsidiaries Fuji Xerox Australia and Fuji Xerox New Zealand, which saw sales figures inflated by around $450 million over six years, have led to a clean out of top management in Tokyo.
Fujifilm Holdings is replacing Fuji Xerox chairman Tadahito Yamamoto, deputy president Haruhiko Yoshida, and three other executives together with a corporate officer. A total of 10 executives and auditors will also have their salaries and bonuses cut.
There have been no announcements regarding management changes at Fuji Xerox Australia or New Zealand, although it has been reported at least two senior executives have already left Fuji Xerox NZ.
Shigetaka Komori, chairman and chief executive of Fujifilm Holdings, plans to take on the dual role of chairman of both the parent company and Fuji Xerox.
Mr Kenji Sukeno and corporate vice-president Masaru Yoshizawa apologised for the accounting deceit at a news conference on June 12.
At the heart of the scandal was leasing arrangements for copiers. Fees for a leased photocopier are in part based on a usage (‘per click’) charge. A Fujifilm investigation committee found that when billings fell short of projections, managers in New Zealand and Australia reported inflated numbers in order to to meet revenue targets.
An internal investigative committee said the dodgy accounting occurred due to a lack of proper oversight over foreign subsidiaries on the part of Fuji Xerox, the concentration of authority in the presidents of the two foreign subsidiaries, and a salary system that was based on sales figures.
Fuji Xerox Australia and New Zealand are controlled by Fuji Xerox Asia Pacific with Fujfilm Holdings in Japan the overarching parent company. US company Xerox has a 25 percent stake in Fuji Xerox.
The story has been simmering away in New Zealand since late last year following a whistle-blower’s relevations. It takes on a political flavour with Fuji Xerox a preferred government supplier. New Zealand’s Serious Fraud Office said it intends to review the independent report.
It was only after the investigative committee looked deeper into the situation that Fuji Xerox Australia was also implicated.
The scandal prompted Fujifilm Holdings to delay announcement of its 2016/17 financial reports for several weeks.