Fuji Xerox president Hiroshi Kurihara and Asia Pacific president Isamu Sekine are in the country telling Australian staff and printers that the company has taken all necessary steps to ensure that its corporate governance has been rectified, following the investigation into the period Neil Whittaker was CEO in New Zealand and Australia.

Kurihara apologised to his staff and says the beefed up corporate governance will never again allow the possibility of a situation from occurring as happened in the Whittaker years, where top salesmen were heavily incentivised to the disadvantage of the company, internal checks and balances were weakened, and the company racked up a $450m internal loss, in what its independent report called a ‘sales at any cost’ culture.

Kurihara says, “I have apologised. Fuji Xerox has now put systems in place to make sure that our integrity and reputation will be restored. We have also acted on all the suggestions made in the initial independent report. We will never again have a situation where sales incentives are allowed to cloud judgement. We are also in the process of appointing a chairman for Fuji Xerox Australia who will be responsible for governance.” That chairman is expected to arrive in the next couple of months.

Speaking to Australian Printer the top brass said that Fuji Xerox customers, including commercial printers, were not financially impacted by the scandal, and will not be. Kurihara says, “The issue was an internal accounting irregularity, which essentially came down to the type of leases that sales were booked under. Printers have not and will not be paying more for their hardware, software, services or click charges. As far as they are concerned there is no impact.”

For Fuji Xerox itself though there has been a significant impact, with multiple staff departures in Australia, a dip in sales – although local CEO Sunil Gupta says it is not certain if this is due to the issue or is just cyclical – and damage to its reputation. In New Zealand the company has entered a voluntary suspension of sales to government departments and institutions.

Asia Pacific president Isame Sekine says, “There was no issue with cash flow in the company, and no contracts were breached, it was an internal accounting problem.”

The company is considering legal action against the people involved, it has already taken advice from lawyers, but is yet to decide if it will press ahead with action. It is not saying who it is considering suing, but it is almost certain to be the Mr A named in the Fujifilm investigative report, named by New Zealand MP Winston Peters as Neil Whittaker.

The Fujifilm investigative report revealed a ‘sales at any cost’ culture, a Tokyo head office with its eye off the ball as it struggled with stagnating domestic sales, and an autonomous local boss – Whittaker –  who changed the structure of the local business to weaken the power of its legal and financial departments over its sales arm.

Fuji Xerox Australia managing director Sunil Gupta says, “The issue is now behind us. We have corrected our procedures and processes, and put systems in place to make sure this is no longer part of our business. Ethics and integrity are the foundation of our business.

“Our focus now is on our customers. Fuji Xerox is now a solutions and services business. We have positioned the company to enable our customers to be those who benefit from the digital disruption. We are focused on helping our customers significantly improve their performance and productivity, and therefore their profitability.”

Commercial printers represent around a third of the Fuji Xerox business. It remains the market leader in Australia. Gupta says, “We are driving forward with innovation that will see our customers at the forefront of the market in existing and emerging opportunities. The graphic communications sector is our priority number one.”

The company is broadening its base from its toner based digital colour and monochrome printers to include label and packaging solutions, inkjet solutions, workflow solutions.”

Its market leading position in digital colour and monochrome printers is not under immediate threat, however it is facing intense competition from Konica Minolta, Ricoh and Canon, all of whom are also broadening their technologies from their toner based printer base. Fuji Xerox president Hiroshi Kurihara is promising the company will maintain its leading position, he says, “We are committed to maintaining the top spot.”

Gupta says his staff are a key focus, as they deal with the fall-out from the scandal as the meet printers in the field. He says, “We want our employees to be enabled, empowered and engaged. The company meeting this morning saw 400 staff engage in a two way dialogue with the company president, and showed their commitment to the company and its goals.”

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