Fuji Xerox suspends NZ govt contracts as MBIE investigates financial irregularities
July 26 (BusinessDesk) - Fuji Xerox New Zealand is to suspend all three of its all-of-government contracts with New Zealand government agencies as the Ministry of Business, Innovation, and Employment waits to read the full report on irregular accounting practices at the company.
Japanese parent Fujifilm Holdings last month revealed $355 million of "inappropriate accounting" in operations in New Zealand and Australia between 2011 and 2016, according to a report by an independent investigation committee. Fuji Xerox's chairman Tadahito Yamamoto, deputy president Haruhiko Yoshida and two Fuji Xerox directors, Katsuhiko Yanagawa and Jun Takagi, have all resigned.
Fuji Xerox currently holds the all-of-government contracts for print technology and associated services, print devices and print device management services, and office supplies. In a statement, the company said there are no current performance issues or inability to meet service levels under existing arrangements and there will be no disruption to the agencies it supplies.
In a statement, MBIE said: "The ministry is concerned to ensure companies who supply the government are held to the high standards the public would expect and that New Zealand continues to be recognised as a great country to do business. The ministry will make no further comment on this matter until new information becomes available."
The suspension will be reviewed six weeks after the publication of the English translation of the independent report, MBIE said. The contract suspensions prevents Fuji Xerox from seeking new business from public sector agencies and will give MBIE time to understand the full implications.
Fuji Xerox president and representative director Hiroshi Kurihara, who visited New Zealand last week, said: "Fuji Xerox and our affiliates take the findings of the report very seriously, and we will reform our corporate structure through strengthening governance. 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."
"Fuji Xerox New Zealand... is 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.
Earlier this month, the Auditor-General said he was considering bringing forward a review of government procurement after the financial irregularities at Fuji Xerox came to light, but would wait for the MBIE investigation into the contracts before deciding whether he needed to act on the issue. All-of-government panels reviewing public entity procurement, which had been scheduled for 2018/2019, could now be carried out in 2017/18.