HP confirms: Feds investigating the Autonomy acquisition
In its new annual report, Hewlett-Packard says the Department of Justice has opened an inquiry into the $11 billion 2011 deal, now allegedly marred by accounting impropriety.
Hewlett-Packard's purchase of enterprise software company Autonomy has already resulted in controversy, lawsuits and an $8.8 billion charge against earnings. Added to that list today: a Department of Justice investigation.
HP's annual report, released today, confirms that the federal government has opened an inquiry" into the deal.
"On November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy," the report says. "HP is cooperating with the three investigating agencies."
HP acquired Autonomy in August 2011 for $11.1 billion, or 11 times its annual earnings. 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.
Since then, HP and Autonomy founder and former CEO Mike Lynch have traded arguments in the press over who deserves the blame for Autonomy's subpar performance. Lynch recently set up a website that denies HP's charges and says HP mishandled the company after acquiring it. So far there is no comment on the site about the DOJ investigation.
Update, 7:08 p.m. PT: Lynch has responded. You can read about that here.
(Via the Los Angeles Times)