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Judge tough on blatant steel mesh fraud

Related building products companies Timber King and NZ Steel Distributor have been fined $400,950 after pleading guilty to making false and misleading representations about their steel mesh products used to strengthen buildings.

Judge Robert Ronayne sentenced the two companies in the Auckland District Court on April 24, reducing the fine from a starting point of $660,000 for the firms' cooperation, guilty pleas and taking into account their claimed financial position.

The Commerce Commission brought five charges against Timber King and two against NZ Steel Distributor under the Fair Trading Act over claims on batch tags, invoices and receipts and on a forged test certificate claiming the steel had been independently tested and complied with the Australia-New Zealand standard for reinforcing steel and was suitable for structural use in an earthquake zone, which the judge called "straight out fraud".

"It cannot escape the attention of the court that earthquakes are a feature of the New Zealand landscape, both metaphorically and literally, and that is a matter of ubiquitous knowledge," Judge Ronayne said. "The defendants have, in that environment, chosen to deliberately offend in the way described, deterrence is required in these circumstances. Very strong, specific and general deterrence is required in these circumstances."

Wholesaler NZ Steel Distributor and retailer Timber King shared directors Jackie Liu and Ringo Liu.

The Commerce Commission investigated several steel products companies over whether representations of steel mesh met the required standard, laying charges against some and warning others.