NZ Post Asked to "Please Explain"
Sunday 1 Dec 2002 Rodney Hide Press Releases -- Governance & Constitution
National's Murray McCully and ACT's Rodney Hide have written to the Finance and Expenditure Committee asking that New Zealand Post CEO Elmar Toime be asked to explain why he told the committee that Transend had "made a good profit" when apparently it hadn't.
"Mr Elmar Toime assured the Finance and Expenditure Select Committee during its financial review of NZ Post on 12 December last year that, "In short order, Transend made a good profit in the year in question on operations" (2000/01 Financial Review of New Zealand Post Ltd, p.66).
"But the Dominion Post (November 27, 2002, page C4) reports, "New Zealand Post's controversial subsidiary Transend was losing money till three months ago and is now trimming more staff and overheads to make it profitable".
"The article goes on to report Mr Toime saying, "Transend had become profitable in the first (September) quarter. Before that Transend `hasn't made a profit as a stand alone business'.
"Yet Mr Toime told the Committee that Transend had "made a good profit".
"The matter is serious. It goes to the heart of the purpose of the financial review that the Committee was undertaking. The profit/loss of a major subsidiary should be a straightforward question for any CEO.
"Mr Toime's assurance of profitability served to allay somewhat members' concerns about Transend's disastrous performance in South Africa and the extravagant spending in Spain and England that were exposed during the Review. The Committee would no doubt have had further questions if it had realised that Transend was not profitable.
Hon Murray McCully and Rodney Hide have written to the Committee asking that the Committee seek an urgent explanation from NZ Post.
Both NZ Post CEO Mr Toime and former Chairman Dr Ross Armstrong are already before the Privileges Committee on a charge of having misled the Finance and Expenditure Select Committee over denying that they had a copy of the Kroll Report.
For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at email@example.com.