Autonomy founder and former CEO Mike Lynch is firing back at Hewlett-Packard after thewith the U.S. Securities and Exchange Commission today. The report states that the federal government opened an inquiry into HP's acquisition of Autonomy in November and hints that Autonomy's accounting is partially to blame.
"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," Lynch said in an e-mailed statement. "Furthermore, it is now less clear how much of the $5 billion write-down is in fact being attributed to the alleged accounting issues, and how much to other changes in business performance and earnings projections."
HP acquired the enterprise software company in August 2011 for $11.1 billion, or 11 times its annual earnings. Since the purchase, controversy, , and an against HP's earnings have ensued.
HP and Lynch have traded arguments in the press over who deserves the blame for Autonomy's subpar performance. In its fourth-quarter earnings release last month, HP said it had discovered "extensive evidence" of fraudulent accounting and failed disclosures on Autonomy's part leading up to the sale. Consequently, Lynch set up a Web site that denies HP's charges and says HP mishandled the company after acquiring it.
"We also do not understand why HP is raising these issues now given that Autonomy reported into the HP Finance team from the day the acquisition completed in October 2011, there was an extensive due diligence process and Autonomy was audited as a public company for many years," Lynch said today. "We also note the statement in HP's annual report that it received confirmation from the U.S. Department of Justice on 21 November 2012 (the day after HP's first public statement), that the Department had opened an investigation. We can confirm that we have as yet had no contact from any regulatory authority. We will co-operate with any investigation and look forward to the opportunity to explain our position."