14 DAY TRIAL // HP's acquisition of Autonomy, last year, was heavily criticized by analysts and market watchers, but HP went through with it anyway, and by the time Meg Whitman took the helm, it was too late to reverse the deal.
Simply put, HP spent too much on the company, and this is most likely the reason why it didn't come across as unexpected to learn that Autonomy allegedly committed accounting fraud.
At least, this is what HP believes may have happened, after learning that the deal is costing HP $8.8 billion (6.78 billion Euro).
"HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP," HP said in a statement, as we previously reported.
The backlash is now making itself known. In fact, we would say Autonomy is disgruntled if it weren't more accurate to use the word furious.
According to Autonomy founder Mike Lynch, HP completely ambushed it when it accused it of accounting fraud, something that is untrue in itself.
He also says that Autonomy, and himself, isn't going to become the scapegoat for HP's deeper problems, for which the $8.8 billion write off is just being used as a smokescreen.
“This has all been a complete ambush. The last time I spoke to HP about anything was in June [a month after he left the company]. The first I knew about this was the press release,” Lynch told Business Insider upon being asked if HP contacted him yet.
The man also said he wasn't part of the conference call when the announcement was made, nor has he been approached by any authorities about the issue.
Essentially, Lynch argues that HP “tried to blame it on the accounting but obviously something else is going on.”