False accounting and fictitious sales at Fuji Xerox Australia, NZ

The report anonymises the names of executives, though "Mr A" can clearly be identified as Neil Whittaker, the former MD of Fuji Xerox New Zealand who then led Australia before he was shuffled out in May 2016 with a "resignation upon agreement" and a $1 million golden parachute to avoid any potential legal dispute.

CRN attempted to contact Whittaker.   

A number of senior Fuji Xerox Australia executives have exited the company in the past year, including chief financial officer Devlin Bell and chief people officer Beth Winchester.

The company's auditors, Ernst & Young, were sacked in July 2016 and replaced by KPMG.

That million-dollar payout to the managing director came despite numerous allegations of impropriety by "Mr A", who "applied pressure to dissenters and created an atmosphere where opposition was impossible".

An examination of a corporate credit card found that Mr A "and other members originally from the FXNZ office may have repeatedly used their corporate credit cards to pay for dining at high-end establishments".

Over the span of 10 months, three executives spent more than $50,000 on 41 dinners – an average cost per dinner of $1233.

It is alleged that during corporate trips, Mr A withdrew nearly $10,000 in cash in local currency on his corporate credit card but did not submit receipts to support the withdrawals. The report claimed that the company paid $43,704 for private trips for Mr A and his family members between June 2015 to April 2016.

The report also highlights how certain FXA sales employees "that Mr A brought with him from New Zealand were being extremely well compensated".

Five of the nine employees transferred from New Zealand were on salaries that exceeded pay scale benchmarks.

The $1.1 million annual salary of "business development manager E"  – $800,000 of which  was incentives-based remuneration – was 3 to 3.4 times the benchmark level, according to the report, while Mr A's son was paid an annual salary of $740,000, including $420,000 of bonuses.

The investigative report claimed that FXNZ "centralised authority with Mr A by centralising all internal reporting lines with Mr A".

This minimised oversight by the board and allowed the mounting problems to go unnoticed.

"Control functions were not effective and transparency was lacking because the reporting lines to the parent company and others in the group were all limited to Mr A, centralising the flow of information," the report stated.

"In such a situation, and given the lack of effective supervision of Mr A by [Fuji Xerox's Asia Pacific sales headquarters], it was easy for the execution of business by Mr A to run out of control."

Next: Swept under the rug