HP comes under fire in Autonomy disputeOctober 2014
The US computer multinational Hewlett-Packard (HP), which is conducting a long-running dispute over its purchase of the UK technology company Autonomy, has itself been accused of deliberately misleading its investors.
HP bought Autonomy in 2011 for $11.1bn (£6.78bn, €8.63bn) but re-calculated it a year later at $2.3bn, claiming the company had dishonestly inflated its value.
The accusations continued as HP published an internal email from Autonomy’s former chief financial officer Sushovan Hussain to the founder Dr Mike Lynch warning of falling revenues. HP said Autonomy hid this information and falsely maintained its staff were chasing deals.
HP submitted the email last month to a court in California in support of its proposed settlement with its shareholders aggrieved at its handling of the takeover.
It told the court: “HP did not miss the fraud at Autonomy because it wasn’t diligent enough. The problem was Autonomy executives had lied. Repeatedly.”
The US group wants to settle the shareholders’ damages claims and then pursue actions against the former Autonomy directors and their auditor Deloitte, which approved accounts “riddled with misrepresentations and falsehoods”.
Now Lynch has counter-accused HP of burying the real reason for the write-down. He says HP admits in a 92-page document filed with the court that it had expected to make $7.4bn savings from “revenue synergies” – the extra value that comes from a takeover – even though the worth of Autonomy had been downgraded.
Lynch says: “HP has knowingly misled its shareholders, and everyone else, with its accusations and its explanations of its own actions.
HP’s final shot in the series of accusations and counter-accusations: “Autonomy executives continued their campaign of deceit throughout HP’s due diligence process.”
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