HP Turns to DoJ, Hopes to Expedite Autonomy Controversy Resolution
On Thursday, Hewlett-Packard turned to the U.S Department of Justice in an effort to increase the odds that a $5 billion write down it’s pushing for the Autonomy deal will be green lighted by officials.
HP acquired the UK-based maker of analytics for over $10 billion in 2011 as a part of a multi-billion dollar strategy to gain share in the U.S. big data market. Pundits such as Oracle CEO Larry Ellison and later Michael Dell considered the price to be inflated, but that’s where the criticism came to a halt – that is, until HP’s fourth quarter results in November.
During the call chief executive Meg Whitman revealed that her company had to pay another $8.8 billion for Autonomy due to various procedural matters, including accounting malpractices that she said made up for well over half the expenses. And to top it all off, it appears that these latter violations have played a role in artificially inflating the UK firm’s valuation ahead of the buyout.
The U.S. Department of Justice joins the FBI and SEC, as well as Britian’s Serious Fraud Office, in running the official investigation into the matter, according to a recently filed annual report by HP. The update naturally triggered a response from former Autonomy CEO Mike Lynch, who has been on the defensive since the beginning of this ordeal.
Here’s a portion of the Lynch camp’s statement about this most recent development:
“We do not understand why HP is raising these issues now given that Autonomy reported into the HP Finance team from the day the acquisition completed in October 2011, there was an extensive due diligence process and Autonomy was audited as a public company for many years.”
The letter adds that “… the Department [of Justice] had opened an investigation. [But] We can confirm that we have as yet had no contact from any regulatory authority. We will co-operate with any investigation and look forward to the opportunity to explain our position.”
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