Fujifilm Holdings Corp. said Monday a third-party panel investigating accounting of its overseas operations found irregularities at an Australian subsidiary in addition to those already found at a New Zealand unit.
The maker of camera, cosmetics and medical equipment said losses from the inappropriate treatment of leasing operations in the six years through 2015 now total 37.5 billion yen ($340 million), widening from 22 billion yen at the New Zealand subsidiary alone.
The both subsidiaries are sales units of Fujifilm subsidiary Fuji Xerox Co.
To take responsibility for the irregularities, Fuji Xerox Chairman Tadahito Yamamoto will step down while Fujifilm President Kenji Sukeno and Chairman and Chief Executive Officer Shigetaka Komori will take pay cuts, the company said.
Along with Yamamoto, four other Fuji Xerox executives will resign and be replaced.
"We apologize for the delayed earnings report and also worrying our stakeholders," Sukeno told a press conference in Tokyo. "We take the situation seriously and will make all out efforts to take preventive steps."
In April, Fujifilm postponed the release of its earnings reports for the business year ended in March and set up the third-party panel to investigate the lease transactions by Fuji Xerox New Zealand Ltd. in the year to March 2016 and earlier.
The results of the accounting probe received Saturday showed its Australian unit, Fuji Xerox Australia Pty. Ltd., also booked some leasing transactions inappropriately.
The investigation report by the third-party panel pointed out that the overseas units had been facing strong pressure to raise sales and slammed the management at Fuji Xerox, saying that it has a tendency to hide negative information.
Fujifilm said in April a whistleblower reported in July 2015 that there were improper contracts in a lease business inside Fuji Xerox. Although the unit had initially judged them appropriate after conducting an internal probe, an auditing firm later said that was not the case.
Fujifilm is making revisions to its past earnings reports through the year ended March 2016, taking into account the 37.5 billion yen loss.
But the company said its impact on the latest annual earnings ended March was limited, with profits from the sale of part of its shareholdings more than offsetting the loss from the accounting irregularities at the two subsidiaries.
For fiscal 2016 ended March, the company reported a group net profit of 131.51 billion yen, up 18 percent from a year earlier.