23 Jan 2018

Steel maker to face 59 fair trading charges

7:54 pm on 23 January 2018

Another major steel maker is being prosecuted, accused of selling customers substandard seismic reinforcing mesh for years.

Steel mesh, concrete

Photo: 123RF

Euro Corporation, which is among the top five suppliers of steel mesh in New Zealand, faces 59 charges of making false and misleading representations about a type of mesh made between 2012 and 2015.

Read: A timeline of the steel mesh controversy

The Commerce Commission said the SE615 steel mesh was sold as 500E grade steel when it was not up to standard, and not all the batches of mesh were independently tested as Euro had claimed.

Euro's chief executive Tim Thodey said the company was disappointed any charges had been laid but pleased that the Commission's investigation would "finally be examined by a court".

"Companies can sometimes make a commercial decision to roll over on such charges to avoid the time, cost and uncertainty of a trial," he said.

"But we won't be pushed into choosing the easy way over the right way. We will vigorously contest these charges."

The charges were filed on 13 December last year but served on 18 January, he said.

New seismic standards came into force in 2012 after investigations into house floor damage sustained in the Christchurch 2011 earthquake led to a boosting of the ductility - stretchiness - required of the mesh.

Those standards pushed minimum ductility requirements from 2 percent to 10 percent.

The SE615 mesh has not been sold by Euro since March 2016, when the Commerce Commission first raised the alarm about it and other companies' mesh.

The next court hearing will be in Auckland on 13 February.

"In addition to the charges laid against EuroSteel, the Commission has laid charges against a further company but cannot comment further on that at the moment," the Commerce Commission said.

The $200 million listed company Steel and Tube pleaded guilty late last year to 24 charges of misrepresenting its seismic steel mesh, and will be sentenced in March.

Dave Taylor resigned in September after nearly eight years as chief executive. Two other top managers who headed up the distribution and supply chain have also recently resigned.

Two other smaller companies, Timber King and NZ Steel Distributor, entered guilty pleas much earlier, and the judge reserved a ruling on their sentencing till mid-February.

Steel mesh standards have been improved since the scandal erupted in 2016, in particular requiring independent accredited laboratories to run tests rather than in-house testing as Steel and Tube used.

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