A week after HP revealed it would take an $8.8 billion (£5.5 billion) charge for its questionable Autonomy acquisition, the saga is still raging on.
The controversy kicked off after the firm released its quarterly earnings and indicated that the massive writedown was related to British software company Autonomy’s deliberate falsification of its finances and prospects.
But Autonomy’s founder and former CEO, who walked away from the company in May of this year, denied HP’s accusations. In an open letter to HP’s board Mike Lynch, presented a different side of the story.
“I utterly reject all allegations of impropriety,” wrote Lynch, requesting that HP provide “immediate and specific explanations” to support its allegations.
Lynch went on to suggest that mismanagement on HP’s part may be to blame for the failure of Autonomy to perform as expected following the acquisition. “Can HP really state that no part of the $5 billion write down was, or should be, attributed to HP’s operational and financial mismanagement of Autonomy since the acquisition? How many people employed by Autonomy in September 2011 have left or resigned under the management of HP?” he asked.
HP responded to Lynch’s claims by insisting that it has proof of accounting improprieties on Autonomy’s end.
“We believe we have uncovered extensive evidence of a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers,” the company wrote in a statement.
”The matter is in the hands of the authorities, including the UK Serious Fraud Office, the US Securities and Exchange Commission’s Enforcement Division and the US Department of Justice, and we will defer to them as to how they wish to engage with Dr. Lynch. In addition, HP will take legal action against the parties involved at the appropriate time,” the statement continued.
Meanwhile, an HP investor has brought forth a lawsuit against the company, accusing it of intentionally deceiving and misleading shareholders. The complaint, filed in a federal court in San Francisco, lists HP CEO Meg Whitman, former CEO Leo Apotheker, and CFO Catherine Lesjak as defendants.Leave a comment on this article