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Steel & Tube faces 29 court charges for misleading claims over its steel mesh

Wednesday 7th June 2017

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Steel & Tube Holdings is facing 29 court charges of making false and misleading representations about its steel mesh product SE62.

The Commerce Commission filed the charges in the Auckland District Court under the Fair Trading Act, relating to conduct between March 1, 2012, and April 6, 2016, the Wellington-based regulator said in a statement. Steel & Tube has been cooperating with the commission throughout the investigation and is working with the regulator to reach an appropriate resolution of the charges, the Lower Hutt-based company said in a statement to the stock exchange.

The regulator started its investigation in August 2015 after a complaint was laid about the steel mesh, which is used in housing and driveway construction, not meeting the standards required in New Zealand. The commission signed enforceable undertakings in late April 2016 with Steel & Tube that the company would only sell SE62 500E grade steel mesh that passed specific independent testing. The undertakings were also imposed on other companies.

The commission said today that the charges allege Steel & Tube made misleading representations on their batch tags, batch test certificates, advertising collateral and website that SE62 was 500E grade steel, when it was not. The charges also allege that false and misleading representations were made by Steel & Tube that SE62 steel mesh had been independently tested and certified, when it had not. This included using the logo of an independent testing laboratory on SE62 test certificates when the product had not been tested by the laboratory.

Charges were also filed earlier this year against Timber King Ltd and NZ Steel Distributor Ltd in relation to false and misleading representations about 500E steel mesh. These companies have entered guilty pleas and will be sentenced in court in August. The commission said it expects to lay charges against one other company, and investigations continue into an additional company.

Steel & Tube has admitted selling “many thousands of sheets” of earthquake reinforcing mesh incorrectly labelled as being independently certified after it used the logo of accredited independent testing laboratory Holmes Solutions on its steel mesh for four years despite it not having carried out the tests. Steel & Tube’s in-house laboratory, which is not independently accredited by national accreditation body IANZ, had been used to test the mesh.

Steel & Tube said today it continues to stand behind its products, and noted that since April 2016 all of its seismic mesh has been tested externally by accredited laboratories.

The commission has previously said that misrepresenting a product as complying with the standard when it doesn't is a breach of the act for which companies can be fined up to $600,000 per offence.

Shares in Steel & Tube last traded at $2.52, and have gained 45 percent over the past year.

(BusinessDesk)

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