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External report on information astray forwarded to Financial Supervisory Authority

May 4, 2007, 16:00 CEST

Hydro received today the report from the law firm Advokatfirmaet Hjort DA about its investigations into how information about Hydro's results went astray in February. The report does not explain how the information went astray. Hydro has forwarded the report to the Financial Supervisory Authority of Norway for further investigation. The report has also been submitted to the Oslo Stock Exchange.

The report, based on interviews with persons inside and outside Hydro as well as extensive technical investigations, reviews the process to prepare the fourth-quarter report 2006. It assesses compliance with internal routines and provides possible explanations as to how the information went astray. (A Norwegian summary of the report, prepared by Hjort, is available via the attached link in the right-hand column.)

"Despite thorough investigations, we have been unable to determine the source of the leak and we are unable to point to what may be the most likely cause. Furthermore, we do not have any grounds for suspecting that the leakage can be attributed to a disloyal Hydro employee," says Hjort’s attorney-at-law Else Bugge Fougner.

"Neither are there, based on information from the Oslo Stock Exchange and financial analysts, any grounds for claiming that the draft quarterly report was "circulating" in the market."

The report points out that the number of persons in Hydro with access to the draft quarterly results, along with lacking compliance with routines for handling confidential information when preparing the quarterly report as well as the physical design of the company’s office premises, may have increased the risk of information going astray.

Bugge Fougner headed the investigation, which was carried out in cooperation with the data security firm Ibas A/S at the request of Hjort. Bugge Fougner emphasizes that Hydro has cooperated with investigation team and made available all the information requested. All Hydro employees surveyed agreed to share information about their involvement with the quarterly report process and to have their PCs and e-mails reviewed. Hjort has kept the Financial Supervisory Authority of Norway informed of their progress since the investigation was launched on 22 February.

After the information went astray, Hydro has implemented measures aimed at increasing compliance with internal rules for handling sensitive information.

"We take note that Hjort has not identified the cause of the unauthorized disclosure and will of course cooperate with the Financial Supervisory Authority of Norway during their further investigation," says President and CEO Eivind Reiten.

"The report provides useful information about the need to strengthen compliance with company routines and important steps have already been taken. We also intend to reduce the number of persons with access to inside information. The need to limit the risk of leakages must be weighed against the need for accurate financial reporting, requiring the involvement of a number of specialists from different parts of the organization," he adds.

"We will simplify company rules for handling confidential information to make them easier to understand and comply with," Reiten says.