Financial News

  • 2 January 2013, 6:52

Autonomy Founder Rounds On HP Accusers

The founder of the software firm Autonomy, who is facing questions about its value after it was bought by Hewlett-Packard (HP), has launched a detailed defence of the $11.1bn (7.1bn) deal.

Mike Lynch released the new statement in the wake of confirmation from HP, in a regulatory filing, that the US Department of Justice had granted its request to investigate the 2011 purchase.

But a spokesman for Mr Lynch told Sky News that the filing appeared to "water down" many of the allegations it had originally made relating to the sale, claims Mr Lynch continues to strenuously deny.

The Silicon Valley-based computer giant last month said it was writing off $8.8bn of the $11.1bn it had paid for Autonomy, believing it had been over-valued.

Included within that $8.8bn is a $5bn writedown in the software firm's current value.

It accused Autonomy of "serious accounting improprieties" in the wake of concerns raised by a whistleblower following the sale.

These "mislead investors and potential buyers", HP said, adding that it had referred the case to the UK Serious Fraud Office (SFO) and the US Securities and Exchange Commission (SEC).

Its annual regulatory filing, released on Thursday, provided this update: "As a result of the findings of an ongoing investigation, HP has provided information to the SFO, the US Department of Justice and the SEC related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP's acquisition of Autonomy.

"On November 21 2012, representatives of the US Department of Justice advised HP that they had opened an investigation relating to Autonomy.

"HP is co-operating with the three investigating agencies."

In a detailed response Mr Lynch has expressed his frustration that no one had contacted him directly to discuss the claims and that the latest filing contained no explanation for the allegations.

He said: "Simply put, these allegations are false, and in the absence of further detail we cannot understand what HP believes to be the basis for them."

Mr Lynch told Sky News in November that he believed the case was an attempt to excuse HP's wider struggles in a competitive market place.

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