Fuji Xerox barred from NZ government contracts after accounting scandal

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Fuji Xerox barred from NZ government contracts after accounting scandal

Fuji Xerox has been temporarily barred from accepting more work from the New Zealand government until the implications of an accounting scandal at the vendor are fully understood.

New Zealand's Ministry of Business, Innovation and Employment (MBIE) today said Fuji Xerox NZ "agreed a voluntary suspension" that prevented it accepting new government-related work.

Fuji Xerox holds several all-of-government contracts in New Zealand that effectively shortlist it for work in print services and office supplies. Such contracts are designed to help the government use its combined purchasing power to procure common goods and services.

Several vendors hold these contracts in each area of business: for example, in print services, Canon, Fuji Xerox, Konica Minolta and Ricoh are all able to win work from across government.

Fuji Xerox's temporary exclusion from these arrangements is likely to be a win for its rivals, but will not affect the government's ongoing ability to procure such services.

MBIE said the suspension would be reviewed six weeks after an English translation of a report into the company's accounting scandal is published.

The scandal involves padded revenue numbers reported by the Australian and New Zealand sales subsidiaries of Fuji Xerox over a six-year period.

It is tipped to cost the Japanese company's parent Fujifilm $454 million in losses, and has led to Fuji Xerox chairman Tadahito Yamamoto's resignation.

MBIE said it wanted to fully understand what had occurred.

"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," it said.

Fuji Xerox holds contracts with New Zealand government agencies worth more than $70 million for printing devices and services.

MBIE said Fuji Xerox will continue to meet its obligations to the agencies under existing agreements.

New Zealand prime minister Bill English has been under fire over why Fuji Xerox was awarded a large government contract just days before parent company Fujifilm released financials showing a large loss for the 2016 year.

English declined to answer the question, and referred instead to the Serious Fraud Office, which is currently seeking more information into the irregular sales and accounting practices at Fuji Xerox. 

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