28 Nov 2017

Steel company pleads guilty to 24 charges

8:05 pm on 28 November 2017

Steel & Tube has pleaded guilty to criminal charges laid against it almost a year ago for misrepresenting its seismic steel mesh.

Steel and Tube

Photo: Supplied

The listed company will be sentenced in March on 24 charges.

Originally, the Commerce Commission laid 29 charges against the company, accusing it of making false and misleading representations that its mesh complied with New Zealand standards, when it did not.

A second company has now also been charged over the mesh and the commission also expects to lay charges against a third company.

Steel & Tube's share price has dipped from $2.63 in July to about $2 today.

Chief executive Dave Taylor left the company in September after eight years at the helm. Two other top managers who headed up the distribution and supply chain have also recently resigned.

In an interview with RNZ during its initial inquiries into the steel mesh fiasco, Mr Taylor said it was an inadvertent mistake that the company told customers for four years that the mesh had been certified by an accredited laboratory when it had not.

It put the testing lab Holmes Solutions' logo on its test certificates, even though the tests were actually being done inside the factory in a non-accredited manner.

It is understood Holmes Solutions reached a settlement with Steel & Tube.

Two companies - Timber King Limited and NZ Steel Distributor - will be sentenced in the Auckland District Court on 8 December, after pleading guilty earlier.

Steel & Tube refused to be interviewed but said in a statement it had been co-operating with the commission "and has entered guilty pleas to the charges".

A dozen charges related to the "inadvertent" use of a lab's logo at the bottom of test certificates, it said.

"Steel & Tube acknowledged the mistake in March 2016 and immediately removed the logo."

The other 12 charges were about how the mesh was tested, "not the performance characteristics of the mesh", it said.

However, Steel & Tube's seismic mesh did fail tests ordered by the Commerce Commission last year, coming in well under the standard for ductility, or stretchability.

The commission at the time said this failure on its own did not mean a company had failed to comply with the standard.

Steel & Tube today said it had "taken significant steps to enhance its quality and product assurance systems", including now using external accredited laboratories.

It made no comment about whether it had misled consumers.

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