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‘BGC’s allegations are unfounded’

October 13, 2023
in Business
‘BGC’s allegations are unfounded’
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Fletcher Building announces a $486 million increase in the projected losses for Fletchers' troubled Building and Interiors (B&I) division on 16 major construction projects.

Fletcher chief executive Ross Taylor has criticised the report.
Photo: RNZ / Dan Cook

Fletcher Building is defending itself against claims made by a Western Australian building company about leaking pipes, installed between 2017 and 2022, and affecting about 12,000 homes.

A report by BGC Group suggested the plumbing pipes made by Fletcher subsidiary, IPLEX, had a manufacturing fault.

It suggested the problem was widespread and estimated the cost to recall and replace the pipes could cost perhaps A$1.8 billion.

Fletcher chief executive Ross Taylor said BGC had misrepresented the issue, which was confined to Perth.

In a detailed presentation to investors this afternoon, he said Fletcher’s independent expert advice was that BGC’s report was gravely flawed and the findings were unsupported.

“BGC’s allegations are unfounded – their view on causation has changed over time,” Taylor said.

“Our independent expert advice is that the methodology and hypothesis BGC used is gravely flawed and their findings unsupported.

“Notably, the various recent tests completed by BGC weren’t done to replicate comparable real-life conditions whereas our testing is doing just that. BGC has not performed any tests which measure the performance of the pipes against Australian or international standards.”

He said the problem was down to poor installation practices.

Taylor said Fletcher and Iplex were working with the Australian regulator and other builders and plumbers, but was not in contact with BCG.

Fletcher was placed in a trading halt on 11 October, which would be lifted on Monday 16 October.

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