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21/11/2018 — General
STU mesh appeal and counter claim
By Simon Hartley

Two separate court appeals were launched yesterday over Steel & Tube Ltd's (NZX: STU) record $1.88 million fine last month, with the Commerce Commission appealing the sentence, while the steel manufacturer and distributor wants the fine reduced.

The Commerce Commission is appealing the sentence set down on Steel & Tube last month, which pleaded guilty to false and misleading representations about its steel mesh products, culminating in the $1.88 M fine.

Following that, Steel & Tube announced yesterday it had carefully reviewed the judge's decision and believes the fine was excessive, and would launch an appeal.

The Commerce Commission said yesterday that last month Judge Cathcart imposed a $1.88 million fine on Steel & Tube in the Auckland District Court, after it pleaded guilty to 24 charges under the Fair Trading Act.

The charges covered 482 batches of steel mesh, or about 480,000 sheets of mesh, which Steel & Tube sold for about $24 M.

Steel & Tube failed to properly age and test the mesh product and batch test certificates claimed the mesh had been independently tested, when it had not.

The Commission was appealing the sentence on the basis Judge Cathcart erred when sentencing the company.

The Commission said the judge failed to properly attribute the knowledge of a Steel & Tube manager to the company and did not adequately take into account the size of Steel & Tube and the potential for it to gain from its conduct.

Both the Commission, and later Steel & Tube, both declined further comment on their respective appeals, now that the matters were again before the courts.

The fine is reportedly he highest handed down under the Fair Trading Act.

Other Commission mesh investigations at the same time later saw Fletcher Steel issued with a warning and United Steel and Pacific Steel (NZ) issued compliance advice.

Timber King and NZ Steel Distributor was sentenced and fined $400,950 after pleading guilty to seven charges and Brilliance International Ltd was sentenced and fined $540,000 after pleading guilty to 20 charges. There remain 59 charges against Euro Corporation before the courts.

*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.

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