The British Post Office scandal is taking new turns as Fujitsu– the Japanese company behind the faulty Horizon accounting software has been urged to take accountability for the defective tech which might have led to the wrongful trial of many staff for theft and false accounting by the post office between the years 1999 and 2015, after computer malfunctions caused shortfalls in their accounts.
A week ago, the IT giant faced inquiries to conclude if they were accountable for the scandal that led to many post office workers under prosecution.
A Series of Scandals
Fujitsu’s software had been the center of software scandals before. In 2002, Fujitsu came under scrutiny for the glitches at ATMs of one of the major banks in Japan. This caused more than 2 million debits. Another mishap happened in 2005, when the company was kept liable for a trading loss of $300 million after the company’s Tokyo Stock Exchange software could not cancel a false order. This went along and ended up as a decade-long battle and in 2015, a Japan court ruled that the firm wasn’t legally responsible.
After many years, Fujitsu’s software conducting the operations of the stock exchange malfunctioned, resulting in the loss of a full day’s trading in 2020. A spokesperson for the company mentioned that they apologize for the trouble caused to the concerned authorities. The incident pushed the company’s top officer to take a 50 percent pay cut for four months as an act of public apology.
According to reports, at least 123 municipalities in June 2023 had to terminate their operations of the company’s system that assisted in the issuance of residence cards to holders of the country. A month earlier to the said incident, the machines in convenience stores proceeding municipal certificates began failing.
Fujitsu and the UK government
Horizon was launched in 1999 and began reporting false cash shortfalls across the country. The accusations had caused a lot of mental trauma for the people, many lost their jobs and livelihoods. The company agreed to have an inquiry into the matter and investigations have been going on since 2021.
“The inquiry has reinforced the devastating impact on postmasters’ lives and that of their families, and Fujitsu has apologized for its role in their suffering,” the firm said in a statement this week.
In the year Horizon was introduced, the company secured a £184m contract for the development of Libra, a software aimed at standardizing case management transactions across 300 magistrates’ courts. Despite costing three times more than anticipated, Libra struggled to generate basic financial information. Fujitsu faced challenges in 2008 when the NHS terminated its digitization contract, leading to a legal battle that the Japanese company eventually won in 2014, costing the UK government £700m.
Despite controversies, Fujitsu was awarded over 190 public contracts totaling £6.7bn in the past decade, with 43 contracts still active, amounting to £3.6bn, including the Horizon contract. Even after being removed from the government’s list of preferred suppliers in 2022, Fujitsu continued to secure government contracts through standard procurement processes, despite attempts by ministers to prevent further engagements due to its perceived “woeful” performance, as indicated by Lord Maude of Horsham, a former Cabinet Office minister.
New Findings and finally Compensation!
In a turn of events, finding that the accused postmasters were innocent, the government decided to cancel the convictions of the postmasters and pay hundreds of millions of pounds in compensation. Several members of the parliament argued that Fujitsu should contribute to the compensation.
“I think there is a moral obligation for the company to contribute,” Patterson told the House of Commons Business and Trade Committee. He also mentioned that the said matter had already been discussed with the senior leaders of the company in Japan.
Nearly $1 billion was wiped out from the company’s value since the announcement by the company’s European chief about the moral obligation of the company to contribute. Shares again fell by 4% in Tokyo, and are down 8% since the year began.
Fujitsu was launched in 1935, and since its birth, the company has produced laptops, chips, software, mobile phones, and even home appliances. After the post-war economic boom, the company expanded and started operations in Western countries including the United Kingdom. Fujitsu made the FACOM 100, Japan’s first-ever computer.
Takahito Tokita is the Chief Executive officer of the company, and the firm now works with a large number of tech companies to keep up with the technology requirements. CEO along with a group of 49 executives are managing the operations of the company.
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