19 August 2017
Find out more

HP posts $8.8bn charge on Autonomy deal; alleges 'accounting improprieties'

20 November 2012  |  4761 views  |  0 Stock market graph on screen

Hewlett-Packard says it has taken an $8.8 billion accounting charge and asked US and UK authorities to investigate what it calls "accounting improprieties" at Autonomy, the UK software house it acquired last year.

HP agreed to buy Autonomy - which counts a raft of the world's biggest financial services firms, including Citi, Deutsche Bank, Lloyds and the New York stock Exchange, among its customers - for around $10.3 billion last August.

It now says that when Mike Lynch, who founded Autonomy in 1996, left the firm soon after the deal was completed a senior member of its leadership approached the buyer alleging a "series of questionable accounting and business practices" before the takeover.

This prompted an internal investigation - including a forensic review by PricewaterhouseCoopers of Autonomy's historical financial results - which found what HP says "appears to have been a wilful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers".

HP has taken a non-cash impairment charge of $8.8 billion in the fourth quarter, more than $5 billion of which is linked to the investigation in Autonomy. The balance is related to the recent trading value of HP stock and other business factors.

The tech giant has referred the issue to the US Securities and Exchange Commission and the UK's Serious Fraud Office for civil and criminal investigation. It is also preparing to seek redress against "various parties" in the civil courts to recoup money for shareholders and warns it intends to "aggressively pursue" the matter.

Shares in HP were down nearly 10% in pre-market trading in New York on the news.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Oracle accuses Autonomy chief of 'whopper' over sales pitch claims

Oracle accuses Autonomy chief of 'whopper' over sales pitch claims

29 September 2011  |  6547 views  |  0 comments
HP agrees £7bn Autonomy acquisition

HP agrees £7bn Autonomy acquisition

19 August 2011  |  5947 views  |  0 comments
Multi-million dollar FSA deal fails to arrest Autonomy slide

Multi-million dollar FSA deal fails to arrest Autonomy slide

13 October 2010  |  5671 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.dorsum.eudownload the paper nowvisit www.niceactimize.com

Top topics

Most viewed Most shared
Mobile contactless spending accelerating in UKMobile contactless spending accelerating i...
8945 views comments | 23 tweets | 23 linkedin
Norwegian banks and startups form fintech clusterNorwegian banks and startups form fintech...
7815 views comments | 19 tweets | 23 linkedin
RBS to bring Silicon Valley to EdinburghRBS to bring Silicon Valley to Edinburgh
7182 views comments | 10 tweets | 7 linkedin
hands typing furiouslyWhy Blockchain Might Not Be The Future For...
6446 views 1 | 5 tweets | 3 linkedin
Apple sidelined as Beijing transit system launches payments appApple sidelined as Beijing transit system...
6306 views comments | 11 tweets | 9 linkedin

Featured job

Find your next job