Japanese Fujitsu liquidates its Russian division
Japanese electronics developer and infrastructure solutions provider Fujitsu is liquidating its Russian legal entity. Lawyers admit that this case could become a “model” for stopping the activities of large businesses in the country
Japanese Fujitsu launched the process of liquidating its Russian business in August, according to data from the Rusprofile service. The local legal entity Fujitsu Technology Solutions LLC will be liquidated in August 2024. Fujitsu suspended direct deliveries of its products and services after the start of a special military operation in Ukraine , but has not yet announced a complete withdrawal from the Russian market.
RBC sent a request to Fujitsu.
What is Fujitsu known for?
Fujitsu was founded in 1935. Promotes solutions to increase business sustainability (reducing the impact of production on the climate , optimization and digitalization of production and logistics, etc.), its own software and it services; provides system integration, consulting, virtualization and cloud services; sells equipment for data centers, electronic components, etc. Owns 44% in Fujitsu Client Computing Limited, a joint venture with Lenovo (51%) and Development Bank of Japan (5%), which produces personal computers and tablets , laptops and other consumer devices. It also owns 44.05% of Fujitsu General, which produces air conditioners. In the 1990s, the company was a prominent player in the plasma TV market, but in 1999 it transferred this area to a joint venture with Hitachi Ltd, and in 2005 Fujitsu completely withdrew from it.
Fujitsu's revenue in the first quarter of the 2023 financial year (ended June 30) amounted to 799.64 billion yen ($5.8 billion at the average rate for this period), profit - 6.24 billion yen ($45.5 million). The company predicts that by the end of 2023 its revenue will reach 3.86 trillion yen ($29.7 billion, based on the forecast at the DOLLAR /yen exchange rate for July 2023 - March 2024), and profit - 218 billion yen ( $1.68 billion). The company has about 124 thousand employees worldwide, according to information on the Fujitsu website.
The Russian legal entity Fujitsu was created in the early 2000s. It is 99% owned by the Dutch structure Fujitsu Technology Solutions BV, 1% by the German Fujitsu Technology Solutions GMBH. In RUSSIA, the company sold comprehensive solutions in the field of information and communication technologies, as well as laptops, personal computers and components. In 2022, Fujitsu Technology Solutions' revenue fell by 24% compared to 2021 and amounted to 675 million rubles. The company received a loss of 119 million rubles. instead of net profit 63 million rubles. a year before. In 2022, the company had 40 employees (in 2021 there were 65).
Commercial DIRECTOR of Holodilnik.ru Alexey Pogudalov says that due to the high cost of the brand’s devices and great competition, the brand can no longer be called popular: “In laptops, they have long since faded into the background due to the high cost of production in Europe (this was the main model range, supplied to Russia) relative to competitors who made devices in Chinese factories. In monitors, due to high competition and greater demand for analogues, they have also practically dropped to an insignificant share.” According to Pogudalov, the only category in which the company remains in demand on the market is computer components. However, the company is not a leader in this either; their components can be replaced with analogues or imported through parallel imports , he pointed out.
Representatives of Wildberries, Ozon and DNS noted that personal computers, laptops and Fujitsu components are presented on their sites in minimal quantities and the departure of the Japanese brand will not affect the business of Russian companies.
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Participants in the Russian market of servers for data storage and processing gave a similar assessment of the departure of the Japanese company. The most negative effect of the company’s departure may be an increase in prices for brand equipment and problems with warranty, but all this will not be critical for the Russian market, says Ilya Khala, CEO of the 3data data center network. “Other companies left even earlier, and the market is already ready for such scenarios. Those who used Fujitsu's services will either switch to other systems or arrange supplies of equipment through parallel imports. Of course, all this will affect the price, but now the cost of any foreign equipment or service has increased,” Hala said. In his opinion, it will be more difficult with warranty and maintenance, but “Russian engineers have long learned to operate and carry out scheduled work on imported equipment.”
The equipment is available for parallel import, confirms Oleg Shalnov, director of the IT project management and integration department of the Rosenergoatom concern. “Customers using the equipment will certainly lose a number of opportunities, but Fujitsu did not occupy a large market share, so its departure will not have a significant impact,” the expert emphasized.
Are there any risks due to liquidation?
Alexey Pogudalov noted that the need to close this representative office was long overdue. “And in this situation, they can write off losses and debts under a successful pretext. They did not have any production facilities in Russia, and there will be no tangible negative from their departure,” Pogudalov said.
Writing off a company's debts is possible only after the legal entity is declared bankrupt, and initiating a liquidation procedure can significantly speed up the time frame for bankruptcy, explained lawyer and expert of the Moscow Digital School educational platform Andrei Tretyakov. “If there are unfulfilled obligations to creditors, the liquidated company bypasses the monitoring procedure; bankruptcy proceedings are immediately opened against it, which subsequently entails the liquidation of the organization,” Tretyakov explained.
But voluntary liquidation is possible only if the legal entity has a liquidation balance sheet confirming the repayment of all debts, said Zoya Galeeva, managing partner of the Center for Working with Troubled Assets. The notice of liquidation, which must be published in special media, must indicate the procedure and deadline for creditors to present their claims against the company. During this period, Fujitsu's creditors will be able to assert their claims, which may become an obstacle to the termination of activities without repayment of debt.
The Russian Fujitsu Technology Solutions has never had its debt collected in COURT, Tretyakov notes. In January 2023, the appeal court confirmed the refusal of the previous instance to satisfy the claim of Loko-Bank, and the proceedings on the claim of one of the largest electronics distributors in Russia, OCS Distribution, were terminated due to the refusal of the plaintiff. Apparently, the dispute was settled out of court, the lawyer argues. “In my opinion, the liquidation of Fujitsu in Russia can become an example of both the conduct and termination of a large business, when all obligations to creditors are fulfilled on time, and emerging claims are resolved without trial. Even if some outstanding claims are subsequently identified , creditors will be able to protect their rights by initiating the bringing to subsidiary liability of the beneficiaries of the liquidated company,” Tretyakov concluded.
“In any possible scenario, the result will be the exclusion of the legal entity from the register. The only question is whether the company will pay off its debts on its own or will be forced to go through a long bankruptcy procedure,” noted Inayat Beytuganova, leading lawyer in the dispute resolution practice of the EDB law firm.