During the final months of ex-CEO Leo Apotheker's leadership at HP, the company's executives and board missed key opportunities that could have put it off of the acquisition of British software company Autonomy--a purchase that HP would later .
HP executives were told about a claim of improper accounting at Autonomy before Wall Street Journal., but never relayed that to the board or CEO, according to the
Outside auditors for Autonomy had told HP executives during a conference call, days before the August 2011 deal, that an Autonomy executive had raised an allegation of improper accounting at the firm, the paper claims, citing sources involved in the acquisition.
The auditors added that the allegation was later found to be groundless, however the HP executives on the call failed to pass the allegation on to HP's board and CEO, the WSJ reported--a missed opportunity to stop a deal said to have been regretted almost immediately after being approved.
The missed message was set against a backdrop of massive upheaval at the top echelons of HP, where executives were distracted by the potential acquisition alongside considering the.
The report claims that HP regretted the deal almost immediately after it was signed, and was seeking a way out of it.
To manage the decisions, the board split into two: one codenamed Hermes, which focused on the PC business sale or spin-off; the other codenamed Tesla, which looked into the Autonomy deal.
According to the report, the split board disrupted HP's normal procedures during an acquisition, which usually require that the finance committee review and accept a proposal before submitting it to the full board for consideration; however, this never happened in Autonomy's case.
The report claims that HP regretted the deal almost immediately after it was signed, and was seeking a way out of it--a move that would be impossible under UK takeover rules unless it could prove financial impropriety.
Executives, including, were said to have been told in mid-2012 of allegations that the company had been manipulating its numbers. An ensuing internal review conducted by HP tied the on its software unit to "serious accounting improprieties" at Autonomy--a charge that Autonomy's CEO (at the time of its acquisition) Mike Lynch, .
Since the writedown, Whitman has said that, while a sale of the business .
HP had not responded to request for comment at the time of writing.