Fujitsu gets $1B market cap haircut after TV disaster drama airs Fujitsu has seen $1 billion wiped off its market value after a week in the political and media spotlight for its role in the UK’s Post Office Horizon scandal, which prompted the European chief exec to say the company was morally responsible for providing compensation. According to Bloomberg, shares fell 4 percent by the time …
Obviously the Post Office itself is also responsible, but to clarify:-
The point being made is that Fujitsu was- and is- responsible for ICL's part in the scandal, i.e. it's not one of those cases where a company which did something wrong later gets bought out, where the buyer knew nothing at the time of purchase until it later blew up in their face.
This was done entirely under the period of Fujitsu's ownership.
Hmmmm…
How many Fujitsu staff can genuinely claim completely clean hands?
This mess has been pretty much common knowledge in the industry (and thanks to the efforts of Private Eye and the like increasing numbers of people outside the industry) for a very long time. If
were willing to keep taking the money, signing new contracts, or taking employment with an organisation under a cloud of that size and nature without asking themselves (and their management) a few questions then they’re kind of part of the problem…
'Hmmmm…
How many Fujitsu staff can genuinely claim completely clean hands?'
Well, let's look at that, they have around around 7000 current UK employees with tens of concurrent service contracts running, they all must have had some idea of what was going on right? But let's not stop there, there could have been around the same amount of retirees in the 20 or so years duration of that contract so that's another 7000. Surely they must have had some inkling to what was going on?
Right with you there bro, let's tar them all with the same brush. No less than they deserve eh?
Oh come on. This mess has been in the public space for a very long time.
If people chose to associate themselves, or continue their association once it became clear that something was going very wrong at Fujitsu, and that people were being seriously harmed then at the very least they’ve been taking dirty money.
The level of culpability may vary (from “lots” to “not at all”) but complicity is still there at some level, and yeah, working for or making money out of Fujitsu is, like (voluntarily) working for or making money out of IG Farben, probably not going to be something you’d want to to bring up in dinner party conversation for a while…
Let's try a small thought experiment.
Imagine you, Jonathan Green, were working for Fujitsu from, say the early '90s.
Somewhere about 2009 you hear about this problem with Horizon with which you have had no contact at all.
What do you, personally do next? What are your options?
No, Fujitsu will.
If they have to sack workers who- through no fault of their own- suffer as a consequence of their employer's lies and incompetence elsewhere, that's on them.
And, ironically, it was a similar holding of jobs to ransom which helped allow the whole thing to happen in the first place.
It was Fujitsu who - keen to finally get paid for the project- used their status as a major UK employer and the implied threat to jobs to pressure the UK government into rolling out a system they already knew to be unfit for purpose when the government was considering cancelling it.
All government software contracts should expire and be reviewed annually. No exceptions.
All corporate development houses fucking stink. All of them. Hire graduates, teach them how to fuck up like the previous folks to keep the bad habits going. Fire them for incompetence. Hire more grads.
Hardware every few years.
Interesting idea.
Situation1.
Contract is going to take 2 years to go live. We expire contracts every year. So half way through development the contract's expired and work stops until review is complete and contract re-let to previous incumbent. In the meantime the contractor reallocates the staff who were working on it to another contract. Contract restarts with new staff until some of the original staff can be reallocated back to it. The re-reallocated staff now have to catch up with what's happened while they were on the other contract which itself has had to cope with the influx of staff and their release.
Situation 2.
Contract is live and is processing work so the client is completely dependent on the contractor. The annual expiry date comes round. Contractor demands a massive hike in price to continue. Expiring the contract when it's in operation simply puts the clients balss in a vice and gives the handle to the contractor.
The solution is to have more than one contractor, independent of the other to act as a counterbalance. A second lightweight presence with minimal footprint that can step in and takeover should $PRIMARY be found to be cocking up, lagging, driving budgets up etc because they've had a foot in the door on the project from day zero and they know exactly where the project is at...that way you've always got a second option on standby that can step in at relatively short notice to take over should $PRIMARY fuck things up and $PRIMARY can be fucked off swiftly with minimal contractual litigation and bullshit.
You don't have to wait for one contract to expire for a new one to begin, there doesn't have to be a full blown, drawn out handover. You can operate two contracts at once...or more.
With this in place, it's unlikely that $PRIMARY will cock up as hard with the threat of the floor disappearing underneath them.
Since collusion is already illegal under the enterprise act 2002, we have frameworks to provide the legal nuts and bolts for this sort of thing...it's just a matter of working out budgetary allocations etc for it...which if your counterbalance is there to ensure that budgets don't run out of control, shouldn't be a problem...the cost for this can come out of the billions of pounds of taxpayer money that will be saved.
This creates a situation where it's in the interests of $SECONDARY to find as many problems as possible with $PRIMARY because their reward is the income should $PRIMARY be squashed and it's in the interests of $PRIMARY to do the best possible job they can because they don't want $SECONDARY coming in and pissing on their parade. Taxpayer wins. Government Ministers don't have to go on TV to try and explain things they don't understand, lengthy court cases and hearings bypassed...everyone is a winner.
don't stop there, plenty of others to go after too, in no particular order
Police
NHS
Social Services
Armed services
Labour/Conservatives/SNP/Green/Liberal Democrats/Welsh Labour/DUP Parties
Government regulators
Train companies
Councils
religious entities
I'm sure others can add to the list the many entities who have wronged citizens and then double downed on them to cover their lies.
If you're going to do that, you need to cancel all the contracts of Crapita, Crapgemini, Infoshit, Sercrap and all the others too!
You say that like it's a bad thing.
Then there'd be no-one left to do any of the work...
There would be, they just wouldn't be employed by any of the companies above.
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.
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.
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.
"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.
the special powers Post Office has are derived from Royal Mail's privileges and position (investigating mail fraud, etc etc)
In the USA this was split off into the US Postal Investigation Service (USPIS) but that never happened in Britain and Post Office as a separated company should never have inherited this power (Banks don't have it, why should any other money handler?)
Courts can only act on the basis of the evidence put before them. If prosecution witnesses are colluding to present false evidence it’s not down to the court if horrible things result.
There may be questions about the use/misuse/abuse/non-use of “expert witness” status for Fujitsu employees providing technical evidence to support the prosecutions, and I think (even before Legal Aid was hollowed out) there are huge issues around the funding of defence cases which revolve around technical questions, and where the prosecution has vastly more access to resources but that’s a different (if connected) question.
This is compounded by the fact that in UK law there's an assumption that the machine is always right and it's up to the defence to prove that it's not.
From the Graun
"Then there was a potent ingredient thrown in by the legal world. Just before the scandal began to unfold in 1999, a legal change was introduced stating that there would now be an assumption that computers were “reliable” unless proven otherwise.
Previously, a machine’s reliability had to be proved if it was being used as evidence. It has now been revealed that the Post Office itself lobbied for that law change. In its submission to the official consultation on the issue, it said the previous requirements were “far too strict and can hamper prosecutions”. The legal change would help it go on to privately prosecute more than 700 subpostmasters."
https://www.theguardian.com/uk-news/2024/jan/14/a-tragedy-is-not-far-away-25-year-old-post-office-memo-predicted-scandal
Courts can only act on the basis of the evidence put before them.
The courts decide what evidence to believe, and are notoriously willing to accept some evidence much readily than others. Their willingness to believe police officers, for example, has led to many miscarriages of justice.
And why the hell were Fujiitsu staff allowed to act as expert witnesses in Horizon cases?
Firstly, at least in the event of a jury trial, the jury is the tribunal of fact. If the criminal rials were held before a jury then the evidence was weighed and believed by 12 members of the general public, people like you and me (unfortunately I'm above jury age now so not exactly like me).
Secondly, in the event of the evidence being one-sided, including the situation that the computer is assumed to be right unless proved otherwise, it would be very difficult for a normal* jury to come to reject it.
Thirdly, if there is expert evidence on both sides the outcome can be very different and you might be surprised at the ability of an experienced judge to evaluate evidence.. This is a long read but if you tackle it you may find it enlightening: https://www.judiciary.uk/wp-content/uploads/2022/07/bates-v-post-office-appendix-1-1.pdf
* I have come across at least one irrational jury.
The PO are throwing out a bunch of FUD legal small print on this. It’s true that “anyone can bring a private prosecution”. But they do have special statutory powers to *investigate* which is the important bit (as do for example Councils, Serious Fraud Office). They are trading on the fact that the public don’t know the legal process difference between “investigate” and “prosecute”.
The special investigative powers that the PO have are: to compel you to be interviewed by them, answer such questions truthfully, with your answers being used in evidence later. And the power to request and acquire documentary evidence from you. Not only can they require you to send them all your records, on a fishing expedition, but *they don’t even need to get a court order if you refuse*. Their powers are analogous to the police: they can get a search warrant from the magistrates court, and go onto your property to confiscate what they see as evidence. Without such power, you can’t just go round getting (civil) court orders to send the bailiffs in to search someone else’s property, on the basis that you are looking for evidence for your private prosecution.
Generally, private prosecutions can only use evidence that is already in the public domain, or something that a private investigator could discover. Without search warrants or interrogations, it is rare that a private prosecution would have enough evidence to proceed. The fact that the PO are continuing with this bullshit, trying to hide their special legal powers, shows that they are very much *not* sorry for what happened.
Could you cite the cases where guilty verdicts have been given against the Post Office and a government in this case.
I agree that there could eventually be successful prosecutions brought against the PO and some of its employees in this case at which point you could say they're criminal but I'm struggling to work out what evidence and argument might be used in relation to the governments* in this case. The PO is at arm's length from government.
* Note the plural. There have been several governments, Labour, coalition and Conservative during the period this was running.
"to the fact that a civil service full of lawyers appears incapable of drafting a decent contract"
Speaking from inside the civil service, we do surprisingly have a few good lawyers, despite the shitty pay. However up against the vastly better paid lawyers that any big IT or services vendor fields, and retard politicians who want something signed so they can trumpet "their" achievement to the world, the in house lawyers are outnumbered and outgunned. To tell the truth, it's not even a public sector thing - most big companies buying tech or services have rings run round them by the vendor's sales and contract teams simply due to skewed incentives (ie the seller's team get big bonuses, the buyer's team will be lucky to see a brass farthing), and experience asymmetry (the vendor team does this day in, day out, the buyer's team does it every two to five years). I've also worked for the largest company in the world in it's particular field, with turnover of €100bn+, and they still got shafted by even second tier tech and services vendors, every time.
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.
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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.
do you have any more detail on this like who the person was and date the evidence given,
i'd love to watch that tale on the enquiry youtube channel.
I'll have to agree on this. Dozens of sucessful projects were rewarded by having budgets cut. Th eones we knew were trouble (and said so) blew up in people's faces, to be met with "How much do we need to spend to fix this?" from those same people who wouldn't listen when we told them not to proceed with the project/vendor in the first place
While I can't disagree on that, I'd point out that _exactly_ the same can be claimed about at least one other European government, and from what I read every now and then in press about other governments' (plural) fuckups (plural), it seems there is 'A Pattern' not restricted to the UK. Or this or that political party in power at the moment, because I'm pretty much sure I heard exactly the same accusations about Labour government, and Conservative government before that too (wow, I'm past 'old'!)
So, no consolation, but we're not the only nation ruled by Semi-Competents. Perhaps - a revolutionary thought - given the increasing complexity of human structures, 'semi-competent' is, at best, the best we can hope for, and it's only going to get worse overall?
It's been a couple of decades but I was involved with the implementation of a fairly sizeable stock/inventory/accounts system for the AS/400. It was a heavily customised version of an off the shelf package written by the supplier. The amount of testing we did was enormous and took over a year but the amount of bugs we discovered was shocking. Regardless, though, it was up to us to work with them, adequately test the system with a large cross section of employees and make sure the issues were fixed before we signed off on it. A serious enough problem could have potentially ruined the company so at no point did we simply trust it all worked because they said so.
You're right. Fujitsu are not innocent but with projects of this nature the largest burden of responsibility was on the Post Office to thoroughly test what it was they were buying and make sure it was fit for purpose before it went live.
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".)
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.
Judging from the scandals unfolding around Fujitsu inside Japan, I doubt it coule have made much difference if they did
Let's not forget that that Fujitsu C-level staff _threatened_ the British Ambassador in Japan with government-level economic retaliation back in 1998 when they were contemplating taking action over the Pathways disaster
https://www.computerweekly.com/news/366565720/How-Fujitsu-became-a-central-part-of-the-Post-Office-scandal
Because it's an irrelevant (and hence pointless) quasi-legal distraction- trying to nitpick an issue/distinction that no-one had made in the first place, let alone one that had any bearing on the case.
It doesn't make a blind bit of difference whether ICL was then or now part of "Fujitsu UK", or whether that's what it became, or whatever the setup was.
What matters is that they owned them, and the Horizon scandal happened under Fujitsu's ownership.
> " trying to nitpick an issue/distinction that no-one had made in the first place"
If you had even bothered reading the post I was replying to (hell,. just read the subject line of this thread), Martin was saying that this was an ICL cultural issue, not Fujitsu. He made that point.
I know a lot of people at the old ICL, so was curious as to whether he thought they had integrated (it's probable that I know some of the techies concerned)
From your response, your beef is with the original post, but still, you're way off because Martin was referring to the ground workers, as was I. This was not a question regarding corporate responsibility
. My question was perfectly legitimate as a reply to Martins post, and one I'd still be interested in hearing a response so, despite keyboard warrior bullies like you shouting your uninformed mouths off.
> I know a lot of people at the old ICL [..] it's probable that I know some of the techies concerned [..] This was not a question regarding corporate responsibility [..] keyboard warrior bullies like you
As you yourself noted, I *did* read the original comment as trying to nitpick which corporate/legal entity was responsible, and my reply related solely to the pointlessness of that. (i.e. they were owned by Fujitsu regardless.)
None of which said anything about nor had any bearing either way on the culpability- or otherwise- of any individual employees involved. So I'm not sure who the victim I'm allegedly "bullying" is here...?
Sounds like you're taking it personally on their behalf because you knew some of the individuals involved and now so defensive you're kneejerk-responding to anything resembling criticism without thinking it through.
As I pointed out elsewhere, Fujitsu had owned the vast bulk- 80%- of ICL since 1990, several years before work on the Horizon project even started.
By the time that Fujitsu- desperate to start getting paid back for the work put in- started pressuring the UK government to roll out the known-faulty system (circa 1999) they already owned the entire company.
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?
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?
Apparently this code is in Visual Basic 6 which seems where the max int is 65,535
(Reluctantly dredging up past knowledge of VB6)
In the absence of any type declaration VB6 will use a Variant. What the underlying type will be probably depends on the phase of the moon, but it's likely to be a float of some kind. Of course floating point arithmetic is not really suitable for accounting systems anyway.
Since it's a Variant function, you can pass it anything you like - string, date, boolean, object... and it will faithfully return something or other. Unless it errors, in which case the lack of error handling will probably make itself felt.
There were all sorts of strange things happening including some in the message handling system communicating between the counter and head office so that at the end of a day's trading the accounts didn't balance and the discrepancy was assumed to be the sub-postmaster's fault. Double entry book-keeping doesn't automatically keep you right but it helps to tell you when something's gone wrong and by how much. You still have to work out what went wrong or, if you're the Post Office, jump to an unwarranted conclusion.
I'm sure I read somewhere that when considering the usual suspects for the next massive Government IT project, the procurement process is not allowed to take previous performance into account, so the decision must me made on the RFP responses only.
So the likes of Capita get to hoover up more of our money, and have no down-side to failing mightily.
Yes they are -
https://www.gov.uk/government/publications/procurement-policy-note-0415-taking-account-of-suppliers-past-performance
but.... it needs contracts to be set up so that the performance certs are meanigful, it's a bit woolly, can be gamed quite easily and it's pretty pointless if there's only one realistic supplier with massive barriers for entry for competitors. The problem isn't just selecting suppliers, it's writing contracts and options to make sure that a single supplier can't embed themselves so deep that it will always be cheaper to keep them no matter how crap they are.
I've run a couple of infrastructure projects under European Journal* rules and you are allowed to have pre-qualification requirements relating to criminal acts, ongoing legal cases and behaviour likely to bring the client into disrepute. Theoretically, a single Horizon prosecution of Fujitsu as a company could be used at the pre-qualification stage to exclude them from a procurement. It is difficult - and illegal - to write a pre-qual to exclude a particular supplier but if the will's there it might be possible.
The bigger problem is that these companies are so embedded that they could play tit-for-tat and, for example, threaten not to take up options for upgrading, maintenance, etc. Their ability to do this would very much depend on how the earlier contracts were written; the cynic in me knows who would lose.
*Now we're out of the EU we operate under the WTO's GPA which isn't substantially different from OJEU.
so many scandals and yet nothing happens until way after the event.
these post people have had their lives ruined for more than 20 years and yet only now is something being seen to be done.
I read this story about Greater Manchester Police intimidating citizens
https://news.sky.com/story/i-was-forced-to-strip-naked-in-police-cell-and-threatened-to-drop-complaints-against-officers-says-mother-13050816
truly despicable,
there are many other examples of injustice that is being swept under the carpet & of course these are the ones we hear about.
we need a just and fair system., it is currently the complete opposite!!
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