New Zealand’s Serious Fraud Office has closed its lengthy investigation into Fuji Xerox New Zealand after determining it was 'not in the public interest' to continue an inquiry launched six years ago. In August, the company – now Fujifilm Business Innovation NZ - settled a civil case against former auditor EY and three former executives.
The investigation focused on allegations that former executives at Fuji Xerox New Zealand (FXNZ) used inappropriate accounting mechanisms to inflate the company’s total revenue between 2011 and 2016. These revenue figures were used in reporting to its Japanese parent company.
The SFO began looking into FXNZ in October 2016, after the company reported a pre-tax loss of $51 million for the year. Two months later, the office closed its inquiry saying it would take no action. The investigation was relaunched a year later after parent company Fujifilm released a report revealing that “inappropriate accounting” at its FXNZ and Fuji Xerox Australia (FXA) subsidiaries had overstated revenues by about $A450 million between 2011 and 2016.
FXNZ was ultimately required to restate its accounts by $355 million in 2017. As the investigation continued, the SFO defended its actions in 2019.
In August 2022, Fuji Xerox New Zealand (now renamed Fujifilm Business Innovation New Zealand) settled a civil case brought against its former auditor EY and three of its former senior executives.
In a statement this week, the SFO said: “The scale of potential offending under consideration was a fraction of the original restatement figure. The matter involved a complex range of issues and a large volume of financial data. The SFO’s investigation was carried out in stages and included refining the scope of inquiry to matters within the agency’s remit."
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| 'Not in the public interest': Karen Chang, director & CEO, NZ Serious Fraud Office |
The new director of the SFO, Karen Chang, appointed in April, added: “Having completed this work, we have now reached a stage where we are not satisfied that continuing this investigation is in the public interest.
“In making this decision we considered the high evidential standard needed for commencing criminal charges, the time and resources still required to complete the investigation, as well as the scale of potential offending that would fall within our remit.
“In assessing public interest, a key factor was the absence of any New Zealand-based or vulnerable investors," Chang said.
“As the new director of the SFO, I am taking a fresh look at where we apply our specialist resources and where we can make the most impact in the current environment. It’s important that we focus our time and skill on the cases that matter the most to New Zealanders and their economic wellbeing.”
