Department of Justice Investigating HP and Autonomy

The latter's accounting practices have drawn attention

By on December 28th, 2012 08:50 GMT
The United States Department of Justice has become involved in the dispute between HP and Autonomy, after the former accused the latter of accounting fraud last month (November 2012).

Unlike most other lawsuits making the news, this is not a patent war or anything else of the sort. Rather, it has to do with finances.

Last year, HP bought the human information processing corporation for a very large sum of money: $10.3 billion (8.03 billion Euro) $11.1 billion (840 million Euro)..

Many analysts and finance experts questioned the wisdom of the purchase, and so did Meg Whitman after replacing former CEO Leo Apotheker. She was unable to cancel the buyout though.

This year, HP reached the conclusion that the price wasn't justified and that Autonomy had been “fixing” its financial reports prior to the acquisition.

Autonomy vehemently denied that, and is still doing so, but that wasn't enough for the US Justice Department.

The problem isn't as clear-cut as it sounds, though. HP is, indeed, accusing Autonomy, but it is also facing its own charges.

HP's shareholders are holding it responsible for the acquisition happening in the first place, or at least the auditing firms that checked the monetary records before giving the go.

Deloitte and KMPC, said auditors, are defending themselves saying that no red flags were raised during their investigations.

Meanwhile, HP's executives, officers and board of directors members are being accused of breach of duty and negligence.

Both HP and Autonomy are fully cooperating with the US DOJ, although they have no plans of ceasing the barb trade any time soon. Autonomy’s founder Mike Lynch stated that his company didn't even understand exactly what allegations HP was bringing.

“It is extremely disappointing that HP has again failed to provide a detailed calculation of its $5 billion write down of Autonomy, or publish any explanation of the serious allegations it has made against the former management team, in its annual report filing today,” he wrote in a blog post.
US DOJ investigating HP and Autonomy
   US DOJ investigating HP and Autonomy
MORE ON THIS TOPIC
LATEST NEWS
HOT RIGHT NOW

Comments