Battle over $1.9m fine: Watchdog wants more, Steel & Tube says it's excessive

Tuesday, 20 November 2018

In a statement released to the NZX, Steel & Tube says it will also appeal the Auckland District Court's sentence.

Both the Commerce Commission and Steel & Tube are appealing the latter's record $1.885 million fine for false claims about its earthquake-grade steel mesh.

The commission wants stronger penalties taken against the steel company, but Steel & Tube says the fine handed down by the Auckland District Court late last month is excessive.

In a statement the competition watchdog said it would appeal Judge Warren Cathcart's sentence from last month. It said the judge erred in the ruling by failing to properly attribute the knowledge of a Steel & Tube manager to the company, and not adequately taking into account the size of Steel & Tube and the potential for it to gain from the conduct.

The commission laid the charges against Steel & Tube in 2016.

* Steel & Tube's record $1.9m fine for misleading over steel mesh

Steel & Tube made misleading representations about the grade of its steel mesh.

* Biggest fine yet in steel mesh investigation**

Carthcart's judgement was released last month after the listed company pleaded guilty to 24 charges under the Fair Trading Act.

This is the highest fine to date under the Fair Trading Act for a single company, the commission said.

The charges relate to conduct between March 1, 2012 and April 5, 2016. They cover 482 batches and about 480,000 sheets of steel mesh, which Steel & Tube sold for about $24m.

In a statement to the NZX Steel & Tube the company said it had carefully reviewed the decision and believed the fine was excessive.

'At the time the decision was released by the Auckland District Court, Steel & Tube apologised to its customers, shareholders and staff for the historic breaches of the Fair Trading Act and stressed that the breaches were unintentional,' the company said.

'Both the Ministry of Business, Innovation and Employment and the Structural Engineering Society of New Zealand have indicated that homeowners should not be concerned about the safety or ductility of steel mesh in their homes.

'The Insurance Council of New Zealand also recently reassured homeowners they should not be unduly concerned about insurance claims in respect of homes containing steel mesh from Steel & Tube.'

The prosecution was one of a series of actions brought by the commission against steel mesh suppliers that stemmed from concerns raised in 2015.

Timber King and NZ Steel Distributor were fined $400,950 earlier this year for also making false and misleading representations about their steel mesh products used to strengthen buildings.

Fletcher Steel has previously been issued with a warning.

The commission also filed 59 charges against Euro Corporation in December.