Former Fuji Xerox NZ MD Gavin Pollard has launched a legal challenge to win back his job, claiming he’s been made a scapegoat by the company over its $450 million accounting scandal.
NZ Employment Relations Authority member Vicki Campbell, in a preliminary determination, rejected Pollard’s bid for an ‘interim reinstatement’ but the case will now go before a full hearing later this month.
UK-born Pollard was FXNZ GM Sales from 2012 to 2015 before being promoted to managing director, replacing former MD Neil Whittaker, who left to take up a similar role with Fuji Xerox in Australia.
Pollard was dismissed in August 2017, two months after an independent investigation ordered by parent company Fujifilm found that incomes at Fuji Xerox subsidiaries in Australia and New Zealand had been inflated by $450 million.
The independent report identified a “sales at any cost” culture at the Australasian subsidiaries and revealed that Whittaker had been paid more than $1 million to leave his job as managing director of FX Australia soon after the ‘accounting irregularities” were first uncovered.
FXNZ advised Pollard that the allegations against him included that he may have: for his own personal benefit, actively participated in inappropriate accounting practices; approved and signed off on inflated target volumes; approved actions leading to inflated revenue; and approved transactions that led to significant losses.
Pollard has denied the allegations and said there were “serious deficiencies in the process used by FXNZ to reach its conclusions that dismissal was an appropriate penalty.”
Pollard also dismissed suggestions that he had a close relationship with Whittaker and said that as ‘the last man standing,’ he had been made a ‘scapegoat.’
In her interim decision, Ms Campbell wrote:
Mr Pollard says he was treated disparately from Mr Whittaker who was able to enter into an agreement with Fuji Japan to leave the organisation with a significant payout. He says he was the “last man standing” and became a scapegoat given that both Mr Whittaker and [former chief financial officer] Mr [Mark] Allright had already left Fuji Xerox at the time the report was released. He says he has been dismissed for financial decisions that were well outside his control and for his perceived close relationship with a man who caused significant harm to the company when no such relationship existed.
On the basis of the untested affidavit evidence and the documents lodged with the Authority, I am satisfied Mr Pollard has an arguable case, that the process used by FXNZ was flawed.
Pollard told the authority that he has had to take out an overdraft in order to meet his expenses as he is the sole wage earner in his family.
Mr Pollard says that his reputation, career and credibility will be undermined if he is not reinstated on an interim basis. Mr Pollard has worked exclusively in the industry his whole career and he is concerned that due to the issues being out in the public arena he will not be appointed to another senior position in the industry. Mr Pollard maintains he is innocent of the wrongdoing alleged against him and his dismissal has serious consequences which cannot be altered except by being reinstated.
Campbell found: the balance of convenience weighs against the grant of an order for interim reinstatement. Mr Pollard will be unable to fulfil the duties associated with being the MD due to him being removed as a director and given the lack of trust and confidence held in him by senior executives (with whom he will be required to work closely) and the shareholders of FXNZ.
The matter will go before a full hearing in a couple of weeks. The preliminary judgment can be found here.
Last month, Fuji Xerox began High Court legal action against an unknown number of unidentified “former senior executives” in the Fuji Xerox New Zealand (FXNZ) operation over accounting 'irregularities.'
Meanwhile, the Serious Fraud Office (SFO) yesterday opened a new investigation into accounting practices at FXNZ just a day after the New Zealand government suspended the company’s all-of-government printing services contract and cancelled its office supplies deal.
SFO spokeswoman Andrea Linton told stuff.com that while it was technically a new investigation, the SFO was taking a second look at the "same subject matter" that it had previously investigated.
The company’s print technology and associated services contract has been formally suspended and Fuji Xerox won't be allowed to sign new customers until it meets certain undisclosed “criteria.” Fuji Xerox had agreed to a “voluntary suspension” of those contracts in July.
"There are 93 agencies who are currently customers of FXNZ through the all-of-government contracts, who have been notified of this outcome," said John Ivil, Ministry of Business, Innovation and Employment (MBIE) GM of government procurement.
Last week, Fuji Xerox NZ named former chief operating officer - and former MBIE deputy chief executive of corporate services - Peter Thomas as its new managing director and also created a new position of chairman of the board, to be filled by FX veteran Haruhiko Imai.
“Fuji Xerox is committed to resolving past issues experienced at this subsidiary and ensuring they do not happen again,” said Isamu Sekine, president and CEO of Fuji Xerox Asia Pacific.
“Peter has demonstrated his leadership in revitalising the organisation with openness, fairness, and clarity. Haruhiko has a wealth of experience in leading international businesses and he will be an insightful advisor to the New Zealand management team and excellent chairman of the board."
Imai, who has been with Fuji Xerox for 34 years, began his new role on 1 October.