Fujitsu executives will face a UK parliamentary committee hearing next week, as well as an independent public inquiry, as attention turns to the Japanese IT services company at the heart of the Post Office Horizon IT scandal.
Hundreds of workers at the state-owned UK Post Office were wrongly prosecuted over allegations of fraudulent accounting between 1999-2005 caused by Fujitsu’s faulty Horizon IT system.
While Fujitsu has maintained its market position as the tenth largest IT services provider in the world with limited reputational damage, renewed focus on the UK Post Office Horizon scandal has seen growing calls for the Japanese company to compensate victims and take greater accountability for its role in the case.
Not only has Fujitsu largely avoided controversy over the Horizon project failures but the company continued to win UK government IT contracts after those failures were brought to light.
According to GlobalData public sector research director, Rob Anderson, Fujitsu has flown under the radar because the Post Office management team were very keen to keep a lid on all the problems in a computer system that they had introduced. The Horizon project was undertaken by beleaguered UK British technology company ICL, which Fujitsu acquired in 1990.
“Although Fujitsu had only recently taken over ICL, the premier British IT company of the time, their management that were involved in the Horizon implementation will very much have been driven by the Japanese HQ values. These include standing up robustly to criticism so that they don’t ‘lose face’,” said Anderson.
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Public outcry at the human cost of the Horizon IT project failure is likely to place even further scrutiny on Fujitsu’s role. In a column for the Sunday Times, peers Lord Arbuthnot and Baron Falconer led the charge for Fujitsu to compensate victims and for a full statutory public inquiry “without the restrictions and limitation of the current one.”
A spokesman for UK Prime Minister Richi Sunak said: “Once the inquiry is able to establish the facts and sets them out, those who are found responsible will be held to account, whether that is legally or financially.”
If Fujitsu is indeed faced with litigation, the company’s current cash position puts it in a very precarious position. According to GlobalData, declining cash reserves are already a major cause for concern to the company.
According to GlobalData figures, as of 2023, the company had cash and cash equivalents of $2.44bn (JPY355,901m) compared to $3.33bn (JPY484,020m) the previous year, an annual decline of 26.5%. This resulted in the company recording negative cash flow in 2023 after investing activities of $294m (JPY42,809m) were taken into account.
However, the UK government may think twice about launching legal action and, indeed, may not have done so following the large legal case against Fujitsu for withdrawing from the NHS National Programme for IT that it undertook in the mid-2010s which Fujitsu defended successfully, resulting in multi-million pound costs for the government.
Furthermore, according to Anderson, the UK government is heavily reliant on Fujitsu as the only company of scale that can support and maintain the two largest transactional IT systems in Government – at DWP and HMRC, which are legacy technology from the days of ICL. And according to GlobalData public sector research data, Fujitsu earned £407m in direct revenue from UK Central Government throughout 2022-23.