HP Pursues Legal Action Vs. Former Autonomy Executives
Hewlett-Packard (NYSE: HPQ) will pursue legal action against former Autonomy executives who allegedly misled HP during the M&A process in 2011. The misleading moves allegedly include accounting improprieties and disclosure failures that wrongly inflated Autonomy’s value. Among those HP may pursue: Former Autonomy CEO Mike Lynch (pictured), who exited HP in mid-2011 but denies any wrongdoing. Here’s the update.
HP’s Q4 2012 earnings results, announced today, included an $8.8 billion charge related to the Autonomy acquisition. The HP-Autonomy deal, hatched in mid-2011, occurred under former HP CEO Leo Apotheker, who was ousted in September 2011. Now, current CEO Meg Whitman is looking to bring stability to HP for fiscal 2013.
At the same time HP is seeking justice. According to The Next Web, HP believes some former Autonomy managers purposely misled HP:
“HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP. These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal. We remain 100 percent committed to Autonomy and its industry-leading technology.”
The Next Web went on to note that HP has alerted the SEC and the UK’s Serious Fraud Office for civil and criminal investigation:
“HP has referred this matter to the US Securities and Exchange Commission’s Enforcement Division and the UK’s Serious Fraud Office for civil and criminal investigation,” it stated. “In addition, HP is preparing to seek redress against various parties in the appropriate civil courts to recoup what it can for its shareholders. The company intends to aggressively pursue this matter in the months to come.”
The VAR Guy was not able to reach HP or former Autonomy CEO Mike Lynch for comment. Lynch issued a statement to Reuters, saying he “flatly rejected” HP’s allegations.