Dodgy duvet case put to bed with conviction
Pulling wool over people’s eyes has cost a Rotorua duvet importer a conviction and a fine.
Budge Collection and its sole director Sun Dong Kim were fined $71,250 by the Auckland District Court after pleading guilty to falsely claiming duvets Kim imported from China mainly contained alpaca wool.
The Commerce Commission said Kim was charging two retailers that cater mainly for tourists $185 for the duvets, which it said was about double the wholesale price of sheep wool duvets. But when the commission tested three duvets it found they contained less than 4 per cent alpaca fibre.
Judge Rob Ronayne said a ‘‘substantial increase’’ in penalty levels was required to reflect Parliament’s intention to ‘‘denounce and deter’’ such breaches of the Fair Trading Act.
He said the misrepresentations were ‘‘virtually impossible’’ for retailers or consumers to detect.
‘‘Consumers were plainly not in a position to check the composition of goods. In these circumstances, as with retail purchase, consumers place trust in the accu- racy of representations. Here there was a breach of trust,’’ he said.
Commissioner Anna Rawlings said the type of offending of which Kim was convicted could impact on the industry by giving the country a ‘‘negative reputation’’.
It was the third case taken by the commission in recent months against companies making inaccurate claims about the composition and origin of cashmere and alpaca products, she said.
‘‘Alpaca duvets are marketed as being superior to wool duvets and we expect businesses to provide clear information about the products they are selling,’’ she said.
The commission said it has previously prosecuted nine companies and eight individuals for selling imported alpaca rugs as ‘‘Made in New Zealand’’, and for claiming duvets were predominantly alpaca or merino when they were not.
The most recent case was in May. Nangong Ltd and its owner Yun Qiang Hou were convicted and fined more than $109,000 after admitting to false claims that its duvets contained alpaca wool and were made in New Zealand.
The previous eight cases resulted in convictions and fines reaching a total of more than $1 million, the commission said.
Finance firms offer refund
Two Wellington-based finance companies have refunded a combined $1.5 million to borrowers after an investigation by the Commerce Commission. Adelphi Finance and Shaw Personal Finance have refunded customers or reduced customer account balances by more than $1.4 million and $100,000 respectively, the commission said. The refunds followed an investigation in which the commission found the lenders were likely to have breached consumer credit laws. The commission said their contracts were unlikely to comply with the Credit Contracts and Consumer Finance Act because they did not include all of the required key information.
Arena liquidators reach deal
The liquidators of Arena Capital, trading as BlackfortFX, have come to a financial arrangement over a claim against director Jimmie McNicoll. It will not affect any action being taken by the Serious Fraud Office after the discovery that $9 million raised from investors by McNicoll and Arena was spent mainly on cars, travel and properties rather than foreign exchange investments. Arena’s assets were frozen by the Financial Markets Authority in May and it was placed in receivership and liquidation. Liquidators Grant Graham and Neale Jackson of KordaMentha have recovered a total of $2.8m.
Meridian Energy profit drops
Power company Meridian Energy’s net profit for the year to June 30 dropped by a quarter to $185 million from a year ago. Meridian is 51 per cent state-owned and generates about a third of New Zealand’s electricity, mostly from South Island hydroelectricity schemes. Electricity sales in New Zealand were up $39m to $939m. Sales in international markets, mostly Australia, were up $16m to $70m. Shareholders will be paid a final dividend of 90 cents a share on October 15, which will be imputed to 90 per cent.
Hutt’s business owes millions
A company part-owned by a businessman who previously bribed an ACC boss is in liquidation, owing close to $7 million. Gregory Alexander Hutt’s business, High Street Management, was put into liquidation on April 18, as it was unable to pay debts as they fell due. Soon after it was put into liquidation, the company went into receivership but was later returned to liquidation. The receivers outlined in their first and final report that the company owed more than $6.96m to creditors.
Dividend despite big loss
New Zealand Oil & Gas may have made a loss of $51.8 million over the past year, but it is to start paying a dividend again. Shareholders will receive 4 cents per share in October. The $51.8m loss is worse than the $15.5m loss from the year before. It was due in part to the significant loss in Cue Energy Resources, a Southeast Asia and Australia-focused gas exploration and production company. Cue has since announced a shift in focus and an intention to reduce costs. But the NZOG group had a cash balance at June 30 of $96.8m, up from $83.7m a year ago.