Faulty steel mesh: Commerce Commission takes legal action against three companies

  • 05/12/2016

Steel & Tube says it is one of the three companies facing charges over the alleged selling of steel mesh that doesn't comply with building standards.

The Commerce Commission last year launched an investigation into five companies after complaints ductile steel reinforcing mesh they were selling didn't meet New Zealand standards.

The mesh is usually used for reinforcing concrete floors and driveways.

Revelations of flaws in the testing regime prompted warnings some house insurance may be compromised and led to an overhaul of government regulations last month.

The commission now alleges three of the companies misrepresented their mesh and made unsubstantiated representations about the product.

It says it hopes to file charges under the Fair Trading Act early next year.

In a statement to the NZX on Monday, Steel &Tube confirmed it was one of the three businesses facing prosecution, but said customers could still have confidence in its product.

"The commission's decision in relation to Steel & Tube relates to the application of the testing methodologies, not the performance characteristics of our seismic mesh," it said.

The company said ambiguities in the testing standards were an industry-wide issue.

The commission has not named the other two companies.

Two other companies, Fletcher Steel and United Steel Limited have also been issued with a warning and compliance advice, respectively.

In September, construction litigators Adina Thorn announced it would be leading a class-action lawsuit against mesh makers on the behalf of owners whose properties have been built in the past four years.

But the Insurance Council said home owners didn't need to be unduly concerned and suggested they contact their insurers if they had worries.

The government in November increased the number of samples that needed to be tested and change rules to clarify how and by who the tests have to be conducted. Those changes will come into force in May next year.

The commission has previously said it was also investigating companies Brilliance Steel and Euro Corporation.