Fuji Xerox New Zealand boss latest accounting irregularities scalp

The boss of Fuji Xerox New Zealand has left the company following a scandal which uncovered $350 million in accounting irregularities.

Gavin Pollard, who was managing director of the company for more than two years, and was general manager of sales for three years before that, has left the organisation.

The office products firm said Fuji Xerox Asia Pacific president and chief executive Isamu Sekine would take over until a successor was appointed.

"With continued strong shareholder support from the ultimate parent, Fujifilm Holdings, and the intermediate owner, Fuji Xerox Asia Pacific, customers in New Zealand can be confident that Fuji Xerox New Zealand (FXNZ) will continue to lead the market in the delivery of print, document management and business optimisation solutions.

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"No further comment will be provided."

Pollard's departure followed Fujifilm ordering an investigation into FXNZ in April to look at the appropriateness of accounting practices.

It found inappropriate accounting had caused losses to shareholder equity at the parent company worth $230m in New Zealand, and $121m in Australia (FXA), after revenue was overstated by about $473m.

A summary of the investigation detailed how an accounting firm had reason to suspect fraud had occurred at FXNZ, and revealed former managing director, Neil Whittaker, was paid more than $1m to leave the company.

Three executives, as well as Fuji Xerox chairman Tadahito Yamamoto, resigned, while many senior executives took a pay cut.

Last month, the company voluntarily agreed to stop bidding for government contracts while officials waited to absorb the details of the investigation.

It had secured contracts worth more than $55m since 2012, which have drawn criticism from NZ First leader Winston Peters.

FXNZ has said the issues were historical and wide changes had been made as it looked to regain trust.

Those efforts to regain trust, both with staff and customers, were ramped up last month when Fuji Xerox president and representative director Hiroshi Kurihara visited New Zealand for the first time.

A "communications meeting" was held with staff from across the country in Auckland, attended by other top executives including Asia-Pacific operations president Isamu Sekine and Asia-Pacific operations senior general manager marketing Takayuki Togo.

In an exclusive interview after the meeting, Kurihara said the "matter" came as a great shock to the company's customers and staff.

Kurihara said Fuji Xerox had been considered a model company by its customers and peers in Japan.

The irregularities here were unprecedented.

"Fuji Xerox's reputation has a great history.

"There has been no such big problem in the past."

The company has introduced appropriate accounting practices for contracts which had caused the issues, a strengthening of the finance and audit arms, strict new rules regarding performance evaluation and incentive rules, as well as the reorganisation of lease business organisations.

Compliance education, strengthened governance and audit functions, independence of audits, a stronger risk management structure, improved whistleblower systems, and better performance measures had also been introduced.

The Serious Fraud Office last year decided not to investigate the company, but was now obtaining additional information in light of the report.

Fujifilm has also not ruled out taking legal action against anyone if clear illegality was found.

Kurihara said it was not easy to say how long it would take to put this matter behind it, or how long any further investigations might take.

"We want to regain that really good reputation and we are trying really hard to take great, strong action," he said.