Mesh sold after certificate forged

WELLINGTON: The Commerce Commission let an Auckland company continue selling steel mesh after it knew the firm had forged a test certificate.

Timber King and a related company, NZ Steel Distributor, were fined $400,000 in the Auckland District Court last week for misrepresenting seismic reinforcing mesh which is used in house concrete slab floors.

The commission is defending its approach.

The company used the letterhead from an accredited laboratory called SGS, and the names of two SGS employees on the certificate.

The lab found out and told the Commerce Commission in October ‘‘the certificate was a forgery, in that it did not relate to testing carried out by it as stated,’’ the ruling said.

The commission’s mesh investigations snowballed the following year to ensnare half a dozen other companies, including major construction industry players.

Timber King kept selling mesh: between November 2015 and February 2016, it sold 1970 sheets, enough for about 100 houses.

Asked by Radio New Zealand why it did not step in, for instance, by asking Timber King to voluntarily and temporarily stop selling mesh, the commission said in a statement the fake certificate was for an initial batch of mesh imported from China.

This batch was all sold before it found out about the fake certifi cate, the commission said.

A second imported batch was different, it added.

However, the court ruling shows that while this second batch was better quality than the first batch, later testing would prove it was still substandard.

The second batch had an authentic test certificate from an SGS lab in China, the commission said.

However, the court ruling makes clear these certificates did not comply with New Zealand standards either.

The commission went on to say it ‘‘cannot order a firm to cease selling a product, but can apply to the court for an injunction to prevent ongoing misleading representations’’.

But in March 2016, the commission asked — rather than ordered — two other companies, including industry major Euro Corporation, to stop selling mesh while it investigated them. The companies complied; they have since both been prosecuted.

Asked if, by its inaction, the commission had exposed customers unnecessarily to buying substandard mesh, it said: ‘‘No. The commission has prioritised steel mesh cases because of the significant harm they can cause consumers, competitors and the reputation of the building industry.’’

Timber King sold about 600 sheets of the first batch of mesh in mid2015. Some of this mesh scored as low as one fifth of the standard in accredited tests.

An Auckland Council inquiry found that 32 houses had this mesh put in their floors. Five homes were considered high risk and referred to an engineer who found one was ‘‘of concern’’; 24 were medium risk; and three low risk.

RNZ is waiting to hear back from the council what became of the other 1970 sheets from the second batch.

Timber King, in a business plan, said it had switched from local suppliers to directly importing from China as it was looking for an edge to remain competitive.

The judge said it made ‘‘completely inadequate’’ efforts to meet quake standards. — RNZ