Autonomy founder blames HP for 'misleading shareholders' over fraud claims

Amid a bitter dispute over alleged "serious accounting improprieties," Autonomy's founder hurls a whole cake of blame at HP for misleading its shareholders over the fraud claims.


Tensions between HP and its acquired subsidiary Autonomy show no sign of ending any time soon, after the enterprise software firm's former chief executive fired another round of shots at its parent company.

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In an open letter published Wednesday, Autonomy founder Mike Lynch said the "current evidence" shows that HP was "misleading" its shareholders over claims the British company failed to "disclose failures and outright misrepresentations" about the company's business to the computer maker, back in October 2011 when it was bought for $10.2 billion.

He said that HP "couched alleged misdeeds in general, rather than specific terms," such claims he rebuffed with an emphatic denial. 

Lynch also accused HP chief executive Meg Whitman of making "incendiary and defamatory accusations." 

Lynch claimed in the following 16 months that HP not only "selectively leaked documents" and "frequently [used] material taken out of context to create false impressions and smear our reputations" in order to claim the upper hand over its acquired business. Lynch also noted that HP has not yet provided any information or evidence to substantiate any direct allegations.

He then listed a number of questions HP "needs to answer," not least that the allegations are with the regulators and not his business unit, and that HP managers "fully understood" Autonomy's accounting methods when they acquired the firm. 

It's not the first time Lynch has lashed out at his corporate owners. In September, Lynch  pinned the blame on HP  for its role in the "botched up" acquisition.

The computer maker previously alleged that the company, acquired under former chief executive Leo Apotheker's plan to increase HP's focus as a software firm, used hardware sales to exaggerate its results , despite the fact Autonomy is a software firm.

HP took a massive $8.8 billion writedown in 2012 following the acquisition , which HP claimed was as a result of Autonomy's accounting practices.

HP's accounting chief Marc Levine, who worked at the company since 1988, resigned following the matter .

HP told The Financial Times that the computer maker and software firm previously "uncovered numerous accounting irregularities at Autonomy before its acquisition by HP," adding that it reported those "irregularities to appropriate civil and criminal regulators in the U.S. and U.K."