HP Shareholder Lawsuit Involves Two More Companies
The whole problem with Autonomy is going pear-shaped
Despite how outraged Autonomy got at HP for the implied fraud accusations, there is now a real lawsuit about the matter, one that involves more than these two companies.True, Autonomy doesn't exactly qualify as its own company anymore, since it became part of HP late last year (2012).
Its leading body can still be held accountable though, and that is precisely what HP wants to do now that it has seen just how bad an idea it really was to acquire the corporation.
Not only was the acquisition expensive, but the shareholder backlash was so bad that it cost the company $8.8 billion / 6.78 billion Euro.
HP is now convinced that Autonomy either handled its finances very poorly or committed outright accounting fraud.
Autonomy founder Mike Lynch was none too pleased by this, and still isn't, but at least now he isn't the only so-called scapegoat.
HP has also sued auditing firms Deloitte and KPMG for not noticing or ignoring red flags having to do with Autonomy's accounting practices.
The lawsuit was filed late Tuesday, November 27, in a federal court in San Jose, California, The United States of America.
There is a silver lining though, for the defendants: HP is also accusing its own former board of directors, officers and executives of breach of duty and negligence.
KPMG is denying having been hired to do any audit work or oversee Deloitte's work on the Autonomy deal, which is curious. It only admits to having been enlisted to provide limited services with no relation to that particular audit. Meanwhile, Deloitte maintains that it never found any improprieties and was not responsible for due diligence on HP's acquisition anyway.
Given how much money HP lost over this mess, the lawsuit isn't likely to be solved in any way quickly or on friendly terms.
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