“THE PICOT DEAL”

Gisborne Herald, Volume LXX, Issue 21009, 4 February 1943, Page 4

“THE PICOT DEAL”

CHARGES REFUTED EXPENDITURE OF £66,000 MR. FRASER EXPLAINS (P.A.) CHRISTCHURCH, Feb. 3. Remarks made by Mr. LI. E. Herring, the Democratic Labour candidate, at a political meeting in the Christchurch East by-election were replied to to-day by the Prime Minister, the Rt. Lion. P. Fraser. “His comments about what he called ‘the Picot deal’ were so far astray from the truth that it is necessary to put the facts straight,” Mr. Fraser said. “Mr. Herring said that Mr. Picot’s produce business in Wellington was bought for £65.000 and that Mr. PicoL was appointed Director of Internal Marketing" at £2OOO a year. What did the £65,000 pay for? Mr. Herring asked, and replied ‘The freehold of a very, very awkwardly situated building in Wellington.’ Then he added that after the money was paid difficulty with a butter-patting machine was discovered and accordingly it was decided to erect a hew building in a more suitable position. “Such a statement is simply nonsense,” added Mr. Fraser. “Here are the facts. The purchase of Picol Brothers Limited and Picot’s (Palmerston North) Limited was completed six years ago. The total payment made to the two companies was £65,958 17s Cd, made up, in. round figures, as follows: Freehold property, including the building in Wellington, £28,000, which was the Government valuation (the land is still a valuable asset); stock-in-trade, £27,600; motor vehicles, £2550; goodwill, £1500; allowance for loss in collection of book debts, £5000; total, £63.150. The balance of approximately £2BOO was made up by sundry items of equipment, portions of insurance premiums, and fees.

“Palpably Incorrect”

“Therefore, the assertion that the Government paid £65,000 for an unsuitable building is palpably incorrect. The amount was paid for two businesses as a going concern, with branches in Wellington, Palmerston North and Hastings. The Hastings branch was sold shortly afterwards to the Llawke’s Bay Co-operative Farm Products Limited and a payment on goodwill of £IOOO was received. The Manawatu Co-operative Farm Products Limited recently took over the Palmerston North branch of the business. The balance of £I9OO for goodwill and book debts have this year been written off in the balance sheet. “Since the inception of the Internal Marketing Division, the Thorndon trading branch, which is the actual business sold by Picot Bros., Limited, together with its Palmerston North branch, has made a profit of £58,000 for its five years of operation, while the building is now insufficient to meet the heavily increased demands on its use. The whole of the Wellington egg and butter distribution is carried out from the premises. No butter-patting equipment was _ sold with the building, as Mr. Picot did not pat butter prior to the Government taking over the business. “It is true that Mr. F. R. Picot was appointed Director of the Internal Marketing Division at a salary of £2OOO a year for five years. His contract expired in February last year. I feel that it was only a sense of national duty which compelled him to take on his new and onerous duties in the Supply Department without additional reniuneratiion. Ido not hesitate to express admiration of Mr. Picot’s services for the State. When he joined the Government service he relinquished his post as director of at least a dozen business concerns. In many ways he has proved his merit.