On January 24, 1990, the Government of New Zealand and Graeme Hart of the Rank Group signed a Sale and Purchase Agreement for the Government Printing Office that was to come into effect on January 31, 1990.
The signing of the Sale and Purchase Agreement was the beginning of the end of a poorly conceived sale process that was drawn out over two years. This was due to the Government and their advisors and the consultants that were hired to implement and manage the sale not being able to fulfill its side of the bargain on the day the agreement came into effect. It took a further 10 months before the Crown were able to complete their obligations which would allow Rank full management of the business. But the Agreement signed on January 24 allowed for the Rank Group to take all the profits of the business even though they had only paid a small deposit and during that time the GPO sales revenue was more than the profit the Government made on the sale of this business asset.
To make matters worse for the Crown, Rank managed to get out of paying any interest on the balance of the money owing when they offered to help finalise issues that the government departments and consultants responsible were having. This amounted to Rank saving a further $1.5 million. Rank also were able to save over $2 million off their original bid for the business following an audit after the sale. The purchase of this Government asset was the springboard that was to launch Rank into the country’s wealthiest investment business that 30 years on is worth more than the national debt reduction the assets sales programme was supposed to achieve.
Takeaway – The sale of The Government Printing Office revisits the GPO in the 1980s of change and looks at what went wrong with the sale process and the effects and aftermath the sale created for the business, that years later triggered a Commission of Inquiry due to the very poor sale result that led to a profitable printing, publishing and stationery business being sold for much less than it was worth.