A former Carter Holt Harvey executive faces potential fines of more than $1 million after yesterday admitting 17 breaches of the Fair Trading Act laid as a result of the company knowingly selling faulty house framing timber.
Maurice Reid appeared in the Auckland District Court to enter the
guilty pleas, which carry a maximum fine of $60,000 each. He will be sentenced on the fine-only matters next month.
Both Reid and CHH were charged after it was revealed the company sold timber labelled as high-strength MGP10 when it knew the timber did not consistently meet that grade.
The timber, marketed by CHH as a premium product, was used for trusses and framing in homes and buildings.
Reid, who retired from CHH in 2003, is a former general manager of the company's wood products division and former chief executive of its timber and plywood business Ecopine.
CHH was fined $900,000 in October.
The Commerce Commission, which brought the prosecutions, estimated that about 20,000 houses were built with Laserframe MGP10 supplied by CHH between July 2001 and November 2003.
Carter's MGP10 sales in the period were about $63.4 million a year, the commission said after the company's prosecution in October.
The commission launched its investigation after concerns were raised by the New Zealand Timber Industry Federation.
After testing the timber and finding it under strength, the commission seized documents that proved CHH had known about the problem since 2001.
Commission chairwoman Paula Rebstock said in October that CHH had kept selling the timber and was of the opinion that to do otherwise "would be financial suicide".
It had been warned that the timber could cause problems such as roof deflections and squeaky floors.
"The commission considers that this is one of the most important and most serious Fair Trading cases we have dealt with," Ms Rebstock said at the time.
"It is very concerning that a large corporation like Carter Holt Harvey would choose to deliberately mislead its customers."
