Xerox SA safe within Bytes fold

By Bronwen Kausch for Bytes Technology Group
Johannesburg, 02 Jul 2002

Xerox SA says it is not affected by the international company`s accounting woes as it operates locally as a joint venture with JSE-listed Bytes Technology, and uses South African accounting practises.

David Redshaw, Executive Chairman of Bytes Technology and Chairman of Xerox SA, says the local operations of Xerox will not be affected by the accounting problems at the international company.

Xerox SA is a 50/50 joint venture between Xerox UK and Bytes, although Redshaw points out that Bytes has managerial control of the South African operations.

"The accounting problems arose specifically from the Latin American operations, especially Brazil and Mexico. However as part of a listed South African company, Xerox SA is subject to the accepted local accounting practices," says Redshaw.

On the international front, Xerox head office announced on Friday that it was to restate five years worth of results in order to reclassify more than $6 billion in revenue.

The restatement forms part of an April settlement with the US Securities and Exchange Commission which saw Xerox paying a $10 million fine without acknowledging guilt.

Redshaw says part of the problem arose from booking service revenues at the beginning of a maintenance contract rather than over the full term of the contact period.

He says this kind of accounting principle has never occurred in the local operations and that as part of Bytes, Xerox has been subject to the particularly stringent accounting principles applied to the listed entity.

Although Redshaw admits he has received calls from clients over the international furore, he says he has been able to give sound assurance that all is well with the local company.

Looking at Xerox SA`s performance, Redhsaw says the first four months of the current financial year have seen significant growth from Xerox SA and "market perception of Xerox in this country has always been one of a stable and profitable company".

Responding to criticism from local players around stock availability, Redshaw says problems with Xerox`s high-end colour printer manufactured by Tektronix have largely been rectified.

Xerox International purchased Tektronix two years ago and Redshaw says it has taken the company some time to get production and distribution up to scratch.

Xerox SA has taken over the distribution for Tektronix locally since December last year and Redshaw says the market has since seen an improvement of availability. He also says the Tektronix brand will soon disappear in favour of the new owner`s label.