HP responds to Autonomy founder's memo with 'extensive evidence'

HP claims it has "uncovered extensive evidence" that Autonomy employees tried to "inflate the underlying financial metrics of the company in order to mislead investors and potential buyers."
Written by Rachel King, Contributor

Just a few hours after Autonomy's founder fired a letter at Hewlett-Packard's board of directors, the case has taken another turn with HP's near-immediate response.

This all started after HP admitted in its fourth quarter earnings statement last week that the Autonomy purchase cost its software unit up to $8.8 billion.

But HP also said that "the majority of this impairment charge is linked to serious accounting improprieties" and "misrepresentations" within Autonomy, which were said to have taken place before the merger cleared last fall.

Earlier today, former Autonomy CEO Mike Lynch penned an open memo to HP's board, rejecting "all allegations of impropriety" on his part along with adding in a lot of pointed questions directed at HP.

Here's a copy of HP's response thus far, via The Wall Street Journal:

HP has initiated an intense internal investigation into a series of accounting improprieties, disclosure failures and outright misrepresentations that occurred prior to HP’s acquisition of Autonomy. We believe we have uncovered extensive evidence of a willful 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.

The matter is in the hands of the authorities, including the UK Serious Fraud Office, the US Securities and Exchange Commission’s Enforcement Division and the US Department of Justice, and we will defer to them as to how they wish to engage with Dr. Lynch. In addition, HP will take legal action against the parties involved at the appropriate time.

While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders. In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury.

For more coverage of the latest HP-Autonomy news on ZDNet:

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