Fuji Xerox Sues Executives Over Accounting Scandal

Fuji Xerox Sues Executives Over Accounting Scandal in Australia

According to ARN, Fuji Xerox has launched legal action in the Australian Federal Court against two former executives over the company’s so-called “inappropriate” accounting scandal.

“The litigation follows a case launched by Fuji Xerox New Zealand against former senior executives — initially unnamed — following the fallout of the company’s A$450 million (NZ$472 million) “inappropriate” accounting scandal.”

“In 2017, Fuji Xerox parent Fujifilm Holdings told the Tokyo Stock Exchange a loss of NZ$284 million as a result of improper accounting in New Zealand had blown out to NZ$472 million after inappropriate practices were uncovered in Australia as well.”

Fuji Xerox Australia alleges that the 2015 and 2016 statutory financial reports of the company contained “numerous financial and accounting irregularities” which did not give a true and fair view of the financial position and performance of Fuji Xerox Australia. It is also alleges that the reports did not comply with accounting standards and did not comply with the company’s own policies.

It is alleged “numerous” financial and accounting irregularities in the 2015 and 2016 financial reports allegedly contained “special contracts”.  Fuji Xerox Australia also alleges that, as a result of the treatment of these special contracts, the company’s revenue was “inappropriately” accrued on customer contracts that were either not signed and had not yet seen the “risk and rewards” of the equipment transferred to the customer.

According to Fuji Xerox, irregularities in the 2015 and 2016 management accounts alone allegedly led to a decrease in revenue of A$8.6 million and operating income of A$26.7 million in the 2015 financial year.

As a result of these co-called “inappropriate” practices, accounting standards at the time were not met and former managing director Neil Whittaker and CFO Devlin Bell “knew or ought to have known” of the matters relating to those specific practices and the alleged irregularities.

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