PURCHASE OF BUSINESS

Poverty Bay Herald, Volume LXIV, Issue 19456, 15 October 1937, Page 5

PURCHASE OF BUSINESS

INTERNAL MARKETING DISCLOSURE IN REPORT DIRECTOR’S £2OOO A YEAR (Parliamentary Reportar.) WELLINGTON, this day. The purchase by the Government of the produce business of Picot Bros., Wellington, as the basis of the internal marketing scheme, Is the subject of reference in the annual report to Parliament of the Controller and Auditor-General. The business, he states, was taken over last December. The legal and financial advisers of the Government expressed some doubt as to whether this" undertaking was authorised by the Primary Products Marketing Act, it was decided to charge the capital expenditure and working expenses of the purchased business to unauthorised expenditure account. This course was agreed to by the Audit Department on the undertaking of the Prime Minister that the Government would promote any validating legislation which might be necessary, but the statutory limit of unauthorised expenditure for any year is £250,000, and the purchase ■ of this large business threatened to cause the limit to be exceeded. Therefore, the Prime Minister, explains the Auditor-General, gave an undertaking to have any over-issue validated. The accounts show that while the total unauthorised expenditure came near the limit, it did not exceed £250,000. The cost of purchasing Picot Bros.’ business in Wellington and Palmerston North was £66,059, and a further £5927 had to be provided for running expenses from February 1 until March 31. Set off against the last item are receipts from two months operations, £13,381, so that the net result of the working of tlie business for two months was a credit of £7453.

The managing director of Picot Bros, has become Director of Internal Marketing at a salary of £2OOO per annum.