Autonomy misled HP about finances, Hewlett Packard alleges
November 21 , 2012
Computer maker Hewlett Packard requested U.S. and British authorities on Tuesday to look into alleged misrepresentations of Autonomy's finances before HP took over the UK software group last year.
HP claims Autonomy "inflated" the value of the company prior to the takeover as part of a "wilful effort to mislead".
This resulted in a $5 billion charge in its latest quarterly accounts.
The former management team of Autonomy has "flatly rejected" the allegations.
Three former senior members of the firm, including former chief executive Mike Lynch, said they were "shocked" to see the statement.
"HP's due diligence review was intensive," Autonomy's former chief executive, chief financial officer and chief operating officer said in reference to the process of investigation prior to purchase.
Following the announcement, HP chief executive Meg Whitman said during a conference call: "We did a whole host of due diligence but when you're lied to, it's hard to find.
"(Autonomy) was smaller and less profitable that we had thought," she added.
Taking into account recent falls in HP's share value and lower-than-expected returns from the merger, HP recorded a total one-off charge for the three months to the end of October of $8.8 billion, leading the company into a $6.85 billion net loss.