Accounting firm suspected fraud at Fuji

Fuji Xerox headquarter in Yokohama, Japan. Photo / 123rf

An unnamed accounting firm associated with Fuji Xerox NZ had reason to suspect fraud had occurred and planned on investigating the company, according to a new report.

The report from an independent investigation committee set up by Japanese giant Fujifilm Holdings highlights new information after it was revealed earlier this month subsidiary Fuji Xerox NZ (FXNZ) had "inappropriate accounting".

The new report said an accounting firm gave the company notice that "it had reason to suspect fraud had occurred at FXNZ, and that it would be sending official notice on March 20 to FXNZ of its intent to conduct an investigation".

A separate report by Fujifilm Holdings, released earlier this month, revealed FXNZ conducted some "inappropriate accounting from FY ended March 2011 to FY ended March 2016".

The impact of the operations at the New Zealand arm of the business on parent Fujifilm Holdings shareholders' equity was 18.5b yen ($228m).

The new report, only recently translated into English, lays the blame of the inappropriate accounting at a culture of "sales at any cost".

A segment of the new report shows a company catchphrase was "Mo iccho yaruzo!!" which had a double meaning of "achieve one trillion yen" and "do one more time" in relation to returning the company to 1 trillion yen sales volume.

"It is not difficult to imagine that FX headquarters was placing considerably strong expectations on the officers in charge... strong expectations from management frequently become strong pressure on subordinates," the new report said.

The new report also stated that it was difficult for Japanese companies to manage overseas subsidiaries, "particularly those in Commonwealth nations in the Oceania region."

In a statement released tonight FXNZ acknowledged the report but said the latest findings are "historical" and do not "reflect current business practices."

"Over the last 12 months Fuji Xerox New Zealand has implemented a robust corporate governance structure to support sustainable and responsible operations," FXNZ said.

"The findings of the report will not negatively affect the level of service offered to customers nor will it impact the company's ability to fulfil its contractual obligations under existing agreements," FXNZ said.

Hiroshi Kurihara, president and representative director of Fuji Xerox said in the statement: "I can confirm that Fuji Xerox New Zealand had the support of the whole Fuji Xerox."