DoJ to investigate HP's Autonomy takeover
Hewlett-Packard has revealed that the Department of Justice is investigating its aquisition of British software company Autonomy.
The deal caused headlines last month when HP claimed it had been seriously misled about Autonomy's financial performance in the run-up to the takeover last year.
Announcing that it was to take a $5 billion charge relating to the acquisition, HP claimed that some former members of Autonomy’s management team had used "accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP".
As a result, HP - along with auditing firms Deloitte and KPMG - has been sued by the company's shareholders for failing to spot the irregularities.
Now, as part of its annual report, HP says it's been successful in persuading the DoJ to investigate exactly what happened. "On November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy. HP is cooperating with the three investigating agencies," it says.
Autonomy, though, says it hasn't yet heard from the DoJ, and is continuing to deny that it's done anything wrong. CEO Mike Lynch says HP's still failing to provide a detailed calculation of its $5 billion write down of Autonomy, and suggests that part of the write-down might have more to do with changes in the company's business performance, rather than the Auronomy acquisition.
"Simply put, these allegations are false, and in the absence of further detail we cannot understand what HP believes to be the basis for them," he says.
"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."