Fuji Xerox, the Japan-based joint venture between Xerox and Fujifilm Holdings, said on Monday that its chairman and three other executives were stepping down over accounting problems discovered at its operations in Australia and New Zealand.
Kenji Sukeno, president and chief operating officer of Fujifilm Holdings, which owns 75 percent of Fuji Xerox, bowed and apologized at a news conference along with other Fujifilm executives.
"We will strengthen corporate governance at Fuji Xerox," Mr. Sukeno said.
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Fujifilm had been investigating the way Fuji Xerox sales managers in New Zealand and Australia reported income from photocopier leases. A committee of lawyers and accounting specialists hired by the company concluded that the managers had overstated revenue by 37.5 billion yen, or about $340 million, in the five years through 2016, Fujifilm said on Monday.
The episode carries echoes of other recent accounting scandals that have embarrassed corporate Japan. Toshiba, the sprawling technology conglomerate, is struggling to hold itself together after a series of multibillion-dollar reporting discrepancies and write-downs linked to its United States nuclear power business.
The amount of money involved at Fuji Xerox is much smaller than at Toshiba. But the problems appeared to have a common cause: managers who were unwilling to acknowledge that the business they oversaw was struggling.
How much a customer pays Fuji Xerox for a leased photocopier depends in part on how heavily the customer uses the machine. When the billings fell short of projections, managers in New Zealand and Australia reported inflated numbers in order to to meet revenue targets, the committee of investigators found.
A whistle-blower inside Fuji Xerox, whose name has not been released, initially identified problems at the New Zealand unit in 2015. Fujifilm first disclosed the investigation in April, saying it was investigating what it believed then to be a ¥22 billion accounting discrepancy. In a report delivered on Saturday, the investigating committee said it had also discovered problems in Australia, Fujifilm said on Monday.
Fujifilm said the committee had also examined accounting practices at leasing operations in Japan and other markets but found nothing inappropriate.
The executives whose resignations Fuji Xerox announced on Monday were Tadahito Yamamoto, the chairman; Haruhiko Yoshida, a deputy president; and two directors, Katsuhiko Yanagawa and Jun Takagi.
They will leave their positions effective June 22, pending approval of their replacements at Fujifilm Holdingst' annual shareholder meeting, Fujifilm said. Shigetaka Komori, chairman and chief executive of Fujifilm Holdings, plans to take on the dual role of chairman of both the parent company and Fuji Xerox.
Senior executives will also take temporary pay cuts of between 10 percent and 30 percent, Fujifilm said.
Fuji Xerox was founded in the 1960s to market Xerox's newly developed "xerographic" office copiers in Japan. Xerox and Fujifilm initially shared ownership, but Xerox sold half its stake to its Japanese partner n 2001, at a time when it was struggling financially.