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Fujifilm battles Xerox

  • Xerox’s new CEO, John Visentin, send a letter to Fujifilm stating it spurned a sale to Fujiflim due to an accounting scandal at Fuji
    • Xerox called it “massive” and “ongoing” fraud that permeated a key part of the sale.
    • Xerox threatened to back out of partnership, where almost all Xerox branded MFPs and printers are made by Fujifilm
    • threatened to products directly to the Asia Pacific market and compete against Fujifilm
    • “No matter what you tell the Japanese media, it is abundantly clear that the bad actor here is Fujifilm, not Xerox,”
    • “has concealed from Xerox the true extent of a massive and ongoing accounting fraud….caused by Fujifilm’s own gross mismanagement. The mismanagement and resulting accounting fraud have weighed heavily on our dealings and have cost us both a significant amount of time and money.”
    • “we are now moving to begin sourcing product from suppliers other than Fuji, and we intend to do so more and more in the months and years ahead,”
    • also disputed an article in which Fuji’s CEO sought to portray Xerox as heavily reliant on Fuji, and unable to survive the demise of their partnership
      • “Nothing could be further from the truth. In fact, it is actually Fuji Xerox, which is responsible for nearly half of Fujifilm’s total revenue, that could potentially suffer ruinous consequences from the loss of over $1 billion of revenue from Xerox, its single largest customer. And legally, there is nothing Fujifilm can do to stop that from happening.”
    • Fujifilm counterpunched just hours after Xerox released the letter
      • “Fujifilm believes that Xerox breached its agreements with Fujifilm”
      • “We are confident that our assertion will be validated through the ongoing litigation.”
      • “The letter from Xerox Corp. is the first time we have heard from Xerox since we filed a lawsuit against them last week”
      • “Xerox’s argument on Fuji’s accounting issue is wrong, The accounting issue at Fuji is properly resolved and no longer exists. Moreover, we have completed the audit in all of Fuji Xerox’s operating companies in its territory, including China, by more than one auditing company.”

“It is again no surprise to hear Xerox’s pretense to sell its products directly into the growing Asia-Pacific market,” Fujifilm wrote. “However, realistically speaking, we believe that it would be extremely difficult for Xerox — which does not currently possess any marketing channel in Asia — to build its own channel from scratch.”

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