Commerce Commission forces ministry to release documents relating to Fuji Xerox
The Commerce Commission is forcing the Ministry of Business, Innovation and Employment (MBIE) to hand over documents that include information concerning scandal-hit Fuji Xerox.
The competition regulator has taken the rare of step of issuing the ministry with a “Section 98” order compelling it to release documents, but said neither the ministry nor Fuji Xerox were under investigation.
Fuji Xerox is on an “all-of-government” panel of companies that sell office supplies to about 450 public sector agencies.
But it is “voluntarily suspended” from competing for government business after an accounting scandal involving its New Zealand and Australian subsidiaries that led the Japanese giant to overstate its revenues by about $473 million.
Separate questions have been asked in Parliament about the ministry’s dealings with Fuji Xerox.
A commission spokeswoman said it issued the Section 98 order because Fuji Xerox’s suspension was “potentially relevant” to an investigation it was carrying out into a proposed merger between rival office products firms Staples and OfficeMax, which are making their second attempt to combine.
MBIE was “not willing to provide supplier information on a voluntary basis”, the commission spokeswoman said.
However, she appeared to indicate MBIE’s refusal to voluntarily hand over the documents was a formality, saying MBIE had “requested” the compulsory notice.
MBIE spokeswoman Annie Coughlan appeared to back up that interpretation of the order.
“The ministry can’t just give out information; it must be done for a reason. The section 98 order allows us to provide the information,” she said.
An industry source speculated the order might nevertheless suggest the competition regulator was not willing to take at face value information that MBIE had previously provided about the Staples-OfficeMax merger.
MBIE told the commission in April 2015 that it had no objection to the merger, saying competition from Fuji Xerox and fellow office products companies Corporate Consumables and OPD meant the merged firm was unlikely to be able to exercise monopoly powers when competing for government business.
NZ First leader Winston Peters said in Parliament in May that a former deputy chief executive of MBIE, Peter Thomas, left the ministry to join Fuji Xerox “just before it won a multimillion-dollar government contract” in 2015 – describing that as a “prima facie conflict of interest”.
Coughlan said Fuji Xerox was appointed by MBIE to the all-of-government office supplies panel in May 2015 and Thomas left the ministry, where he had been responsible for corporate services, on July 31 that year, before joining Fuji Xerox the following month.
Thomas’ responsibilities at MBIE included procurement, but Coughlan said the division Thomas worked for had no responsibility for all-of-government contracts and he had “no role in the process or decision regarding the appointment of Fuji Xerox to the office supplies panel”.
Prime Minister Bill English told Parliament in June that there was a thorough investigation of the matters raised by Peters and “no issues came to light”.
If there was any new evidence of anything that looked like inappropriate or fraudulent behaviour, then the appropriate agency would investigate it, he said.