HP has entered into a war of words with U.K. software firm Autonomy, which it bought for $11.1 billion last year. The U.S. computer giant is claiming that it overpaid when it bought the U.K. software maker a year ago, due to accounting improprieties. This, HP says, is the reason it’s suffered an $8.8 billion write-down and huge quarterly loss, and has asked for investigations on both sides of the Atlantic. The FBI is also set to launch an inquiry, alongside the SEC and Britain’s Serious Fraud Office.
Mike Lynch, former CEO of Autonomy, has hit back at Meg Whitman’s claims, saying they are a smokescreen to hide HP’s poor financial results. “It’s [HP] managed the company very badly. It lost around half the staff before I left and the whole of the management team, and the value of the company has now fallen and they’ve been forced to write it off.”
HP is alleging that an Autonomy employee (and thus an HP employee) had blown the whistle on accounting misrepresentations, saying that the previously reported profit margins of 40% to 45% were actually closer to 20% and 28%.AD