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US probes HP’s Autonomy fraud allegations

The US Department of Justice has opened an investigation relating to Autonomy
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First Published: Fri, Dec 28 2012. 04 29 PM IST
HP reported a writedown of $8.8 billion in November, including more than $5 billion it attributed to inflated data from Autonomy. Photo: Reuters
HP reported a writedown of $8.8 billion in November, including more than $5 billion it attributed to inflated data from Autonomy. Photo: Reuters
Washington: US authorities are probing allegations by Hewlett-Packard Co. (HP) that a British software firm it bought out had fraudulent accounts, the US tech giant said in its annual report released on Thursday.
On 20 November, HP reported a writedown of $8.8 billion, including more than $5 billion it attributed to inflated data from Autonomy, acquired by HP in 2011 for more than $10 billion.
The Palo Alto, California-based company demanded that US and British authorities investigate Autonomy, saying “accounting improprieties” before the acquisition led to an “overvalued” acquisition price, which forced HP to take the huge writedown in value.
“On November 21, 2012, representatives of the US Department of Justice advised HP that they had opened an investigation relating to Autonomy,” HP said in its report filed with the US Securities and Exchange Commission.
HP said it had also provided information to the UK Serious Fraud Office and the US Securities and Exchange Commission “related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP’s acquisition of Autonomy.”
“HP is cooperating with the three investigating agencies,” it said.
HP’s call for a probe came in November as it reported a $6.9 billion quarterly loss, of which $5.5 billion was linked to Autonomy and the rest to the slumping value of HP’s own share price.
HP said at the time it had launched an internal investigation “after a senior member of Autonomy’s leadership team came forward.”
As a result, HP said it believed “that Autonomy was substantially overvalued at the time of its acquisition.”
Mike Lynch, founder of the software group Autonomy, has said that members of his management team are being unjustly blamed for the writedown.
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First Published: Fri, Dec 28 2012. 04 29 PM IST
More Topics: HP | autonomy | investigation | fraud |
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