HP confirms US investigation into Autonomy
Company provides information to US and UK authorities
By Jeremy Kirk | IDG News Service | Published 06:56, 02 January 13
HP has confirmed that the US Department of Justice (DoJ) is investigating its US$10.3 billion acquisition of enterprise search company Autonomy.
The company alleges that Autonomy inflated its value through accounting tricks. In a legal filing on 28 December, HP also said it had provided information to the UK's Serious Fraud Office and the US SEC related "to the accounting improprieties, disclosure failures and misrepresentations at Autonomy" prior to the acquisition.
The company said last month it had shared its allegations with those agencies, urging them to open civil and criminal investigations. The DOJ advised HP on 21 November, 2012 of its investigation, the filing said.
HP disclosed a US$8.8 billion writedown in November, around $5 billion of which was attributed to accounting improprieties by Autonomy. The write-down was for impairment of goodwill, a term covering intangible assets such as the value of a brand and good customer relations.
Autonomy's founder Mike Lynch, who left HP in May 2012, has fiercely contested the claims.
"We continue to reject these allegations in the strongest possible terms. Autonomy's financial accounts were properly maintained in accordance with applicable regulations, fully audited by Deloitte, and available to HP during the due diligence process," he wrote in an article.
Lynch further wrote that he and his Autonomy colleagues have not yet been contacted by regulators. "We will cooperate with any investigation and look forward to the opportunity to explain our position," he added.
HP looked closer into the Autonomy acquisition, completed in October 2011, after a senior member of its former management team came forward following Lynch's departure.
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