Regulator probes Steel & Tube's misuse of logo on steel mesh certificates

Thursday 17th March 2016

The Commerce Commission is to investigate Steel & Tube Holdings after the building products company's chief executive admitted selling "many thousands of sheets" of earthquake reinforcing mesh with certificates which wrongly used an independent laboratory's logo.

Steel mesh is used as reinforcement in concrete floor slabs used during the construction of houses, garages and other buildings and can also be used for driveways and pathways.

The logo and contact details of Holmes Solutions, a Christchurch-based independent testing laboratory, had been used on thousands of Steel & Tube's mesh testing certificates over the past four years despite Holmes Solutions not having carried out the tests.

"Making misleading representations, such as claiming a product was tested by a company that has not tested it, is prohibited under the Fair Trading Act in New Zealand," a commission a spokeswoman said.

"As part of that investigation, we will be looking at whether other products in the market comply with the standard," she said. "As this is an active investigation we are unable to comment further."

Steel & Tube CEO Dave Taylor told Radio New Zealand that Holmes Solutions had been involved in developing the testing regime for the product and it was a mistake that its logo had been left on the testing certificates.

Steel & Tube's in-house laboratory, which is not independently accredited by national accreditation body IANZ, has been used to test the mesh. Holmes Solution's lab has been accredited by IANZ.

The Commerce Commission spokeswoman said in-house testing wasn't in itself concerning, as it was commonplace in the industry "and, provided it is done properly, is a valid way of complying with the relevant standard."

Taylor said Steel & Tube had become aware of the logo's use last week and had advised Holmes Solutions this week.

When asked how many certificates had been produced, Taylor said he didn't know an exact number "but there would be many thousands of them because there were many thousands of sheets of mesh."

Two of Steel & Tube's rivals, Euro Corp and Brilliance Steel, were ordered to stop selling their steel mesh products two weeks ago as the Commerce Commission investigates whether the products comply with building standards.

Steel & Tube had done checks in light of those investigations, which is how it became aware of the issue, Taylor said.

The company's media release said it is "fully confident" in the product and denied the certificates were misleading.

“Steel & Tube in no way intended to mislead customers, and has acknowledged the error, and has removed the logo from the test certificate template," Taylor said.

The stock fell as much as 8 percent to $2.18 just after the market opened, from a close of $2.37 yesterday. Recently it was down 2.5 percent to $2.31.

BusinessDesk.co.nz

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