Media company NZME has pleaded guilty to a Commerce Commission charge filed against a subsidiary in relation to the historical sale of magnet sets.
The commission filed court proceedings in December against NZME Advisory, formerly GrabOne, alleging the online retailer supplied the magnetic toys despite being subject to an unsafegoods notice which prohibited the sale of small high-powered magnets sold in sets of two or more due to the safety risk they pose. And that was in breach of the Fair Trading Act.
NZME sold the GrabOne business and assets in October 2021 to Global Marketplace, the Australian company behind Click Frenzy, for $17.5m.
In a statement to the NZX, NZME said it had fully co-operated with the regulator’s investigation into the matter, including undertaking a voluntary product recall process, which was completed in July 2022.
It said the penalties for the charge to which NZME Advisory Limited has pleaded guilty will be determined in due course.
“As previously notified, based on the maximum penalties available under law for the charges and the insurance policies that NZME holds, these proceedings are not expected to have a material effect on the financial position or profitability of NZME.”
The company has made a provision of $206,000 in its full-year financial statements relating to the issue.
“The provision is an estimate of total costs that the group believes will be incurred in relation to the proceedings with any potential fines and costs covered by insurance,” a note in NZME’s annual report stated.
