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Fuji Xerox accounting case – Whittaker denies any wrongdoing or breach of duty

Neil Whittaker, former Managing Director of Fuji Xerox New Zealand and Australia, has filed his defence in the case of FUJI XEROX AUSTRALIA PTY LTD & ANOR (Fuji Xerox Finance) v NEIL WHITTAKER & ORS, the other defendants being former CFO Devlin Bell, accountancy form Ernst & Young, and EA (Andy) Lang, a former EY partner. UPDATED see below

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The case is before the Federal Court of Australia, Justice Colvin

The 17 page document, sighted by this publication, comprises the defendant’s replies to Fuji Xerox’s Statement of Claim concerning the $450 million ‘accountancy scandal’  uncovered in 2015, that was used to stymie the proposed $6 billion takeover of Xerox by Fujifilm Holdings.

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Neil Whittaker, former FXA MD

The essence of Whittaker’s defence is that the alleged irregularities initiated prior to his appointment as Managing Director of Fuji Xerox Australia, and that the accounts in question were filed after his employment ceased, for which he had no knowledge or involvement. He also cites the Civil Liabilities Act 2002, Section 35 (1) which states:

(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and

(b) the court may give judgment against the defendant for not more than that amount.

Mr Whittaker also says he was given a Deed of Release on the termination of his employment, in May 2016, which resolved all matters between him and FXA, FXP and FXAP.

Whittaker cites that the accounts were in the hands of expert internal accountants and also external accountants/auditors EY, in whom the trust was placed to handle the accounts.

He states that: “I acted honestly at all material times and, further and in the alternative, in respect of the conduct found by the Court to constitute the negligence or breach of duty.”

This defence, under the Corporations Act of 2001, section 1318, permits the Court to excuse the defendant from negligence or breach of duty, either partly or wholly.

All matters in FXA’s (and FXP’s) Statement of Claim are either denied, or he says a plea is not required. Mr Whittaker says that: “At all relevant times during my employment with FXA I reported to and worked under the supervision of the President of the International Business Group at FXAP and reported to FXAP regularly on the Australian business, including attending regular meetings held by FXAP.”

A final hearing date is yet to be advised. The New Zealand case continues separately.

UPDATE: "The (Federal Court of Australia) matter is listed for a case management hearing at 9.15 am on 13 August 2020."

UPDATE: Devlin Bell has filed his defence on 7th August. EY and EA Lang yet to file.