Fujitsu shares drop nearly 4% as its Europe chief says compensating Post Office victims is a 'moral obligation'

Paul Patterson, Europe co-CEO of Fujitsu Services, giving proof to the Business and Trade Committee on the Houses of Parliament, London, on what extra will be performed to ship compensation for victims of what has been labelled one of many worst miscarriages of justice in British historical past.

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Shares of Fujitsu sank virtually 4% on Wednesday after the Japanese IT agency’s Europe co-CEO, Paul Patterson, mentioned compensating those that suffered due to the corporate’s defective software program was a “moral obligation.”

The firm, whose shares had been the second-largest loser on the Nikkei index, signaled it might compensate tons of of sub-postmasters wrongly prosecuted within the UK on account of its faulty software program.

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Between 1999 and 2015, 736 sub-postmasters, who’re self-employed department managers beneath contract to the Post Office, had been subjected to prosecutions and monetary misconduct convictions primarily based on inaccurate information generated by Horizon, a software program program made by Fujitsu.

This case acquired new public consideration this yr when ITV broadcast a drama sequence, “Mr Bates vs The Post Office,” in regards to the sub-postmasters battle for justice.

Horizon was manufactured by Fujitsu in 1999 and rolled out throughout Post Office branches to handle monetary transactions. Complaints quickly emerged that it was falsely reporting money shortfalls.

Appearing earlier than British MPs on the House of Commons Business and Trade Committee, Patterson mentioned that “Fujitsu would like to apologize for our part in this appalling miscarriage of justice.”

“We did have bugs and errors in the system and we did help the Post Office in their prosecutions of the sub-postmasters,” he advised the committee.

When Patterson was requested how a lot Fujitsu ought to contribute in the direction of compensation, he didn’t give an actual determine, however mentioned he anticipated to “sit down with the Government to determine our contribution to the redress” as soon as the inquiry was accomplished.

The authorities has put aside 1 billion kilos in compensation for victims of the Post Office scandal.

Speaking to CNBC’s “Squawk Box Asia,” Timothy Morse, founding associate of impartial Japanese fairness advisory mentioned that it was “amazing” that Fujitsu didn’t come up on this case till just lately.

“This scandal dates back years. And the role of the post office has been well known in these court prosecutions, but Fujitsu for some reason had been rarely mentioned in the press.”

Replacing Fujitsu in UK government contracts could be 'very expensive,' says equity advisory firm

In an announcement to CNBC, Fujitsu mentioned “the current Post Office Horizon IT statutory Inquiry is examining complex events stretching back over 20 years to understand who knew what, when, and what they did with that knowledge.”

The assertion additionally added that the inquiry has bolstered the devastating affect on postmasters’ lives and that of their households, and Fujitsu has apologized for its function of their struggling.” The company added it is “absolutely dedicated” to supporting the inquiry “in an effort to perceive what occurred and to be taught from it.”

Morse expects Fujitsu will have to shoulder a “cheap monetary burden,” but the company may not have to bear the whole 1 billion pounds that the British government has set aside as compensation.

On Jan.11, the BBC reported that despite the scandal and ongoing inquiry, the Post Office paid Fujitsu over 95 million pounds to extend the Horizon IT system’s usage for two years.

Fujitsu has not made a provision for the contribution yet, but Patterson said “after we get to that place we are going to completely should make a provision for it.”

When Morse was asked if the scandal meant that Fujitsu would be “persona non grata” for future UK government contracts, he said that it “could possibly be a risk.”

However, he also highlighted that Fujitsu is very close to the UK government after its purchase of British computer company ICL in 1998, which supplied computers to the British public sector.

“The title of Fujitsu has been tainted however … they’re very properly embedded in UK authorities IT contracts. So, really changing Fujitsu will be very costly.”

Fujitsu reputational costs may be more severe than cost of compensating Post Office victims: Analyst