Steel & Tube cops $1.9m fine
Steel & Tube has been fined a record $1.885 million for false claims about its earthquake-grade steel mesh.
The record fine was handed down to the company yesterday for breaching the Fair Trading Act, by making false and misleading representations about its steel mesh products used in construction to provide strength and stability in the event of an earthquake.
The Commerce Commission laid the charges against Steel & Tube in 2016. The fine was the highest fine to date under the Fair Trading Act for a single company, the commission said.
In the judgment released by the Auckland District Court, Judge Warren Cathcart sentenced Steel & Tube after the listed company pleaded guilty to 24 charges under the act.
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.
The offending fell into two categories. The first involved representations on batch tags, batch test certificates, advertising collateral and Steel & Tube’s website that its SE62 steel mesh was 500E-grade steel mesh meeting the Australia/New Zealand Standard for reinforcing steel, when it was not. Steel & Tube had failed to properly age and test the product.
The second category involved false and misleading representations on batch test certificates and Steel & Tube’s website claiming the steel mesh had been independently tested when it had not.
Judge Cathcart characterised Steel & Tube as ‘‘grossly negligent’’.
‘‘Senior management ought to have known of the large-scale noncompliance over the four-year charging period,’’ he said.
Non-compliance with the standard does not necessarily mean the product lacks the physical and mechanical properties of quake-grade steel mesh.
Commission chairman Dr Mark Berry said yesterday that Steel & Tube’s representations arose because senior management of a large company failed to put in place adequate procedures and oversight.
‘‘The penalty imposed today demonstrates that this is unacceptable and high-risk conduct that undermines the confidence of the public in construction products being sold into the market,’’ Berry said.
Lawyer Adina Thorn, whose firm is backing a class action against the company and other non-compliant steel mesh suppliers, welcomed the court’s decision.
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.
‘‘This is unacceptable and high-risk conduct.’’ Mark Berry, Commerce Commission