Fujitsu gets $1B market cap haircut after TV disaster drama airs
- Reference: 1705581014
- News link: https://www.theregister.co.uk/2024/01/18/fujitsu_gets_1_billion_market/
- Source link:
According to [1]Bloomberg , shares fell 4 percent by the time the Tokyo stock exchange had closed. The Japanese firm has seen its value cut by 8 percent since the beginning of 2024.
The most recent move in valuation follows an admission by Paul Patterson, director of Fujitsu Services Ltd and Fujitsu European CEO, that the company bore a moral obligation to contribute to compensating the victims of the Post Office Horizon scandal, which saw 736 managers of local Post Office branches wrongfully convicted of fraud when errors in the system were to blame. More victims are expected to come forward.
[2]
Speaking to members of the UK parliament earlier this week, Patterson [3]said : "We were involved from the very start. We did have bugs and errors in the system. And we did help the Post Office in their prosecutions of the subpostmasters [and for] that we are truly sorry."
[4]
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He said the extent to which the company should contribute to compensation should be determined when the ongoing statutory inquiry finishes.
Meanwhile, Takahito Tokita, Fujitsu’s global chief executive, was asked by [6]the BBC if he would apologize for the company’s role in the Horizon scandal. "Yes, of course," he said.
[7]
Since UK television company ITV broadcast its drama depicting the story of the Horizon scandal, the country's politicians and mainstream media have begun to focus in on the issue.
[8]Post Office boss unable to say when biz knew Horizon could be remotely altered
[9]JPMorgan latest to pile into quantum upstart with $5B valuation
[10]'Technical glitch' in payroll software sparks riots in Papua New Guinea
[11]Why do IT projects like the UK's scandal-hit Post Office Horizon end in disaster?
Prime Minister Rishi Sunak has [12]promised to speed up the process of exonerating Post Office employees wrongfully convicted as well as the compensation process.
The Japanese supplier's role in [13]government contracts has also come under the spotlight. The Financial Times calculated that Fujitsu had won £4.9 billion ($6.25 billion) — jointly and as sole bidder — since the courts ruled the Horizon system was not robust in December 2019. Meanwhile, Sky News announced Fujitsu had won £6.8 billion ($8.68 billion) in public contracts since 2012, also working with Tussell.
Some MPs have called on Fujitsu to contribute to compensation, while others have called for it to be banned from winning public sector work in the UK. ®
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[1] https://www.bloomberg.com/news/articles/2024-01-17/fujitsu-takes-1-billion-knock-as-post-office-scandal-escalates
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZalZP2T@GgReI3ybYSZxWQAAAVc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2024/01/17/post_office_inquiry_latest/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZalZP2T@GgReI3ybYSZxWQAAAVc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZalZP2T@GgReI3ybYSZxWQAAAVc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.bbc.co.uk/news/av/world-67999236
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZalZP2T@GgReI3ybYSZxWQAAAVc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2024/01/17/post_office_inquiry_latest/
[9] https://www.theregister.com/2024/01/16/jpmorgan_quantum_banking/
[10] https://www.theregister.com/2024/01/14/asia_tech_news_roundup/
[11] https://www.theregister.com/2024/01/13/kettle_post_office_horizon/
[12] https://www.theregister.com/2024/01/08/sunak_promises_faster_justice_for/
[13] https://www.theregister.com/2024/01/11/fujitsu_public_procurement/
[14] https://whitepapers.theregister.com/
Re: Fushitesu
And what happens to the staff employed by Fujitsu?
Do you sack all the staff who have had no involvement in the Horizon system or PO account?
Re: Fushitesu
Stop thinking! Grab a pitchfork!
Re: Fushitesu
And torches, don't forget the torches! Burn them all!
Re: Fushitesu
and being that Fujitsu swallowed up ICL, that would be all the old ex-ICL employees too.
Justice
Justice won't be served until Fujitsu and Post Office staff are in prison and their personal property sold to compensate the victims.
Re: Justice
Unfortunately that's just not gonna happen
If government contracts with Fujitsu
do not have clauses allowing for termination in the event of Fujitsu aiding criminal activity (because that is what they have done) then i think we need to expand our spotlight to the fact that a civil service full of lawyers appears incapable of drafting a decent contract.
Especially when Joe Schmo down the road can lose their job for simply being suspected of having a bag of weed.
Re: If government contracts with Fujitsu
I am not a lawyer but as far as i understand there is no need to add clauses to your contracts to deal with criminal activity. If you can prove the other contracting party did something criminal you can ask for them to pay for any resutling damage. Should be pretty straight forward as far as Fujitsu is concerned.
The case for the PO is probably more complicated as they were vested with special sovereign powers and thus should have special responsibilities as well - which makes this scandal much bigger than your usual commercial fraud cause.
Re: If government contracts with Fujitsu
As far as I am aware PO doesn't have any special powers, they were just using right to private prosecution that everyone has.
This means the courts themselves may be culpable, because they could have simply dismissed the cases due to lack of sufficient evidence.
Re: If government contracts with Fujitsu
These were mostly private prosecutions. The mechanisms for PPs and lack of being able to contest "the computer said so" evidence is a major problem.
Re: If government contracts with Fujitsu
"The Post Office has no special authority to bring private prosecutions but instead pursued cases against its staff using its own investigation branch under the "general right in English law for any individuals and organisations to pursue private prosecutions", said the Financial Times.
However, the Post Office and Royal Mail are believed to be the earliest known formal investigations and prosecutors in the world. The Post Office Investigation Branch has employed investigators and lawyers for over 300 years. The Post Office is still wholly owned by the UK government and has plenty of 'soft power' in the legal system. It regularly has joint investigations with law enforcement bodies that do have the statutory powers. It has been given access to the Police National Computer and has the authority to authorise surveillance.
For the prosecutions of the post masters it seems like the Post Office used plenty of special powers for prosecution but without the checks and balances an official law enforcement organisation would have. Hopefully some of the mud will stick this time and they will lose their special status.
Oops
Chickens coming home to roost!
Let's set things straight
Yes, Fujitsu has a share of responsibility, but let's keep it real. Given the shambles that UK government IT projects has been since, well, forever, I'm not convinced that putting Fujitsu at the pillory is an entirely justified approach.
UK Gov is entirely incapable of managing NHS, hardly any of its IT projects are on time and on budget (or even just choose one), so it follows that this project was a shambles from the start, like so many others.
The difference here, and the very unpleasant part, is that there are innocent people who actually lost their lives to a government IT project failure. Someone should indeed be held responsible, but I doubt that Fujitsu should be the only one to blame.
Re: Let's set things straight
The enquiry has already heard evidence from a Fujitsu SW engineer that they were getting duplicate entries in back-office spreadsheets at the time of Postmasters being prosecuted and their main thrust wasn't to find and fix the cause of these errors, but to find and delete the duplicates quickly in case the spreadsheets were used in evidence against postamasters and the duplicate entries weakened the cases by allowing doubt to creep in.
Re: Let's set things straight
“hardly any of its IT projects are on time and on budget”
Is that a uk.gov thing, really? It’s partly confirmation bias, but most of the large IT projects you ever hear about turn out about the same.
Re: Let's set things straight
"most of the large IT projects you ever hear about turn out about the same."
And conversely most of the large IT projects you never hear about were on time & budget. Good news is no news.
Its not Fujitsu, its ICL
Although as ICL's corporate parent Fujitsu bears ultimate responsibility this is first and foremost a home grown scandal.Fujitsu's investment in the rump of an insolvent ICL made good business sense on paper because it gave them entry to UK government work but the workforce and its management were British. For those who have worked at the company there's much in the Horizon tale that sounds familiar, going back decades before and affecting all aspects of the work.
I can speculate as to the underlying causes of the disaster** but unless there is some genuine analysis and introspection rather than 'let's blame the Japanese and just grab what we can from them' then nothing will change. IT disasters will continue, industry will be, by and large, lackluster and things will just muddle along.
(**Class based corporate management detached from reality -- the IT equivalent of "Lions led by Donkeys".)
Re: Its not Fujitsu, its ICL
Nope. Once you buy a company you take on *all* their responsibilities.
It's called due diligence.
That Fushitsu sat there 20 years ago and did not say "you know what, we need to fix this at our own expense" shows them to be in it up to their necks.
And WTF were the Japanese board doing when reviewing their foreign ops?
I wonder if Fushitisu have a 'Corporate social responsibility" statement on their websites.
Re: Its not Fujitsu, its ICL
You're making the assumption that the UK management reported everything back to Japan.
Re: Its not Fujitsu, its ICL
Who cares if they did or not? Who's name is on the box? Who's getting the money?
Re: Its not Fujitsu, its ICL
Fujitsu existed as a separate entity in the UK to ICL for a number of years that ICL was owned by Fujitsu.
When the ICL name was dropped, are you saying ICL basically became "Fujitsu UK" and didn't merge with the pre-existing Fujitsu UK unit?
Accounting system
What I can't get over is that Horizon was just (if I understand correctly) a centralised/distributed accounting and stock control system. Accounting rules - double entry bookkeeping - have not changed appreciably in the last century. Most/all supermarkets seem to have cracked the "difficulties" with accounting/stock control systems. Why were there such difficulties with programming Horizon? Are Fujitsu really that bad at programming?
Re: Accounting system
You may find this video from ComputerPhile of use.
https://www.youtube.com/watch?v=hBJm9ZYqL10
As you say this was a solved problem at the time.
The inquiry evidence includes an internal Fujitsu report about the project https://www.postofficehorizoninquiry.org.uk/sites/default/files/2022-11/FUJ00080690%20Report%20on%20the%20EPOSS%20PinICL%20Task%20Force%2014052001.pdf
Section 7.3 has a couple of problematic code. One of of the examples is a function to invert the sign of a number (i.e. -1 to 1 or -1 to 1). The report states that the function could be refactored to "d = -d".
Public Function ReverseSign(d)
If d < 0 Then
d = Abs(d)
Else
d = d - (d *2)
End If
ReverseSign = d
End Function
Apparently this code is in Visual Basic 6 which seems where the max int is 65,535, what will happen if the function is passed a value of 33,000?
Fushitesu
All Fushitesu contracts in the UK should come under review.
Ideally the company should have all their contracts terminated and it should be banned from operating in the UK.