24.04.2019 kl 08:13 4403

«Hydro reaches agreement with U.S. Department of Justice

On April 23, 2019, the United States Department of Justice (DOJ)’s Civil and Criminal Divisions announced the proposed resolution of their investigations into the alteration of test records by Sapa Profiles, Inc. (now Hydro Extrusion Portland, Inc.) in Portland, Oregon (SPI).
Pursuant to the proposed criminal resolution, SPI agreed to plead guilty to one count of mail fraud. SPI also entered into a settlement agreement with DOJ’s Civil Division. Under these agreements, SPI agreed to pay a total of $46.9 MUSD. Additionally, SPI’s U.S. parent entity, Hydro Extrusion USA, LLC, agreed to enter into a three-year deferred prosecution agreement with DOJ. SPI remains suspended as a federal government contractor and will be working to address this status in the near future.

SPI has been under investigation by DOJ’s Civil and Criminal Divisions regarding certain aluminum extrusions that SPI manufactured from 1996 to 2015, including extrusions that were delivered to a supplier to NASA. SPI learned in 2015 that some test records for aluminum extrusions manufactured by the Portland, Oregon, plant had been altered by certain employees. The misconduct was immediately stopped and the employees responsible for it were terminated. In addition, SPI reported the misconduct to U.S. government officials and SPI’s customers. SPI was suspended as a federal government contractor.

“Since learning of the misconduct and reporting it to the government and customers, we have invested significant time and resources to completely overhaul our quality and compliance organizations. We have also implemented over $14 MUSD in state-of-the-art tensile testing equipment across our North American operations that automates the tensile testing process,” says Charlie Straface, Business Unit President for Extrusion North America.

As part of the share purchase agreement between Hydro and Orkla ASA, Orkla ASA will indemnify Hydro for 50 percent of the liability in relation to the DOJ’s investigations. As communicated in Hydro’s 2018 Annual Report on March 15, 2019, a charge of NOK 157 million has been included in Hydro’s Q4 2018 figures related to the agreement with DOJ.

“We are looking forward to concluding this matter with DOJ. We are committed to serving the needs of our customers and conducting business with the highest level of ethics and integrity,” says Straface»

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