Fujitsu says compensating Publish Workplace victims is a ‘ethical obligation”

Shares of Fujitsu sank almost 4% on Wednesday after the Japanese IT firm’s Europe co-CEO, Paul Patterson, said compensating those who suffered because of the company’s faulty software was a “ethical obligation.”

The company, whose shares were the second-largest loser on the Nikkei index, signaled it would compensate hundreds of sub-postmasters wrongly prosecuted in the UK as a result of its defective software.

Between 1999 and 2015, 736 sub-postmasters, who are self-employed branch managers under contract to the Post Office, were subjected to prosecutions and financial misconduct convictions based on inaccurate data generated by Horizon, a software program made by Fujitsu.

This case received new public attention this year when ITV broadcast a drama series, “Mr Bates vs The Publish Workplace,” about the sub-postmasters fight for justice.

Horizon was manufactured by Fujitsu in 1999 and rolled out across Post Office branches to manage financial transactions. Complaints soon emerged that it was falsely reporting cash shortfalls.

Appearing before British MPs on the House of Commons Business and Trade Committee, Patterson said that “Fujitsu want to apologize for our half on this appalling miscarriage of justice.”

“We did have bugs and errors within the system and we did assist the Publish Workplace of their prosecutions of the sub-postmasters,” he told the committee.

When Patterson was asked how much Fujitsu should contribute towards compensation, he did not give an exact figure, but said he expected to “sit down with the Authorities to find out our contribution to the redress” once the inquiry was completed.

The government has set aside 1 billion pounds in compensation for victims of the Post Office scandal.

Speaking to CNBC’s “Squawk Box Asia,” Timothy Morse, founding partner of independent Japanese equity advisory said that it was “superb” that Fujitsu did not come up in this case until recently.

“This scandal dates again years. And the position of the submit workplace has been well-known in these court docket prosecutions, however Fujitsu for some motive had been not often talked about within the press.”

In a statement to CNBC, Fujitsu said “the present Publish Workplace Horizon IT statutory Inquiry is analyzing advanced occasions stretching again over 20 years to grasp who knew what, when, and what they did with that information.”

The statement also added that 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 corporate added it’s “fully committed” to supporting the inquiry “in order to understand what happened and to learn from it.”

Morse expects Fujitsu must shoulder a “reasonable financial burden,” however the firm might not should bear the entire 1 billion kilos that the British authorities has put aside as compensation.

On Jan.11, the BBC reported that regardless of the scandal and ongoing inquiry, the Publish Workplace paid Fujitsu over 95 million kilos to increase the Horizon IT system’s utilization for 2 years.

Fujitsu has not made a provision for the contribution but, however Patterson stated “when we get to that position we will absolutely have to make a provision for it.”

When Morse was requested if the scandal meant that Fujitsu could be “persona non grata” for future UK authorities contracts, he stated that it “could be a possibility.”

Nevertheless, he additionally highlighted that Fujitsu may be very near the UK authorities after its buy of British laptop firm ICL in 1998, which equipped computer systems to the British public sector.

“The name of Fujitsu has been tainted but … they’re very well embedded in UK government IT contracts. So, actually replacing Fujitsu can be very expensive.”