Steel & Tube, ComCom appeal record mesh fine
Steel & Tube Holdings and the Commerce Commission have each appealed the record $1.89 million fine imposed against the company for misrepresenting steel mesh products it sold. The regulator said Auckland District Court Judge Warren Cathcart erred last month by not adequately taking into account the size of Steel & Tube and the potential it had to gain from the misconduct. Nor had the judge properly attributed the knowledge of a Steel & Tube manager to the company. Steel & Tube believes the fine is excessive, given the breaches were unintentional and that both the Ministry of Business, Innovation and Employment and the Structural Engineering Society of New Zealand have indicated that homeowners should not be concerned about the safety or ductility of steel mesh in their homes. Steel & Tube shares fell a cent to $1.27, taking their loss so far this year to 37 percent. Steel & Tube was sentenced last month on 24 charges under the Fair Trading Act after an earlier guilty plea. The charges, brought by the commission, related to conduct spanning four years, where Steel & Tube sold about 480,000 sheets of steel mesh for $24 million from 482 batches. The regulator argued Steel & Tube misled the public with representations that the mesh met an Australia/New Zealand standard for reinforcing steel when it didn't, and that the batches had been independently tested when they hadn't. Lawyers for the commission had initially called for a fine of between $3.8 million and $4.6 million as a starting point. The judge had started at a $2.9 million fine for the company, discounted to reflect Steel & Tube's cooperation and early guilty plea.