James Moore: Why HP has got questions of its own to answer over the Autonomy saga
Outlook When the saga of Hewlett Packard and Autonomy finally comes to a conclusion it will probably make Beowulf look like a limerick.
A new chapter to this interminable dispute was added when the US giant claimed that the main trading arm of the British software company it paid a president's ransom to buy made 80 per cent less profit in 2010 than first stated.
You may remember that HP – which has alleged Autonomy used every trick in the book to flatter its performance in the run-up to its takeover – wrote the value of the business down by $8.8bn (£5.5bn) in 2012, which meant it had to report a $6.9bn third-quarter loss.
You may also remember that Autonomy's mercurial founder Mike Lynch says HP's complaint is motivated by buyer's remorse, and that its managers ought to be explaining why they messed up his business.
There's a lot of "he said, she said", combined with bickering over the impact of using international financial reporting versus America's preferred method of running the numbers. Meanwhile, in the midst of this toxic stew are authorities from both side of the Atlantic. That has to be a bit of a worry for Mr Lynch given that the US expects the rest of the world to comply with its laws and standards. If the upshot of that is that other British tech companies are a little more cautious about selling Stateside, some good will come of it all.
All the same, given the apparently exhaustive due diligence work carried out on Autonomy by HP and its richly-remunerated team of advisers, why was such a glaring discrepancy not picked up when they first combed through the books? It's not as if analysts hadn't raised the issue. In fact, questions about Autonomy's performance claims had been out there for some years.
HP's Meg Whitman has pledged to get her shareholders' money back, and Mr Lynch is in her cross hairs. But if the problem is as bad as HP makes out – and we're an awfully long way from getting a definitive answer to that (if we ever get one) – then don't HP and its advisers still have serious questions to answer?
Perhaps Meg's shareholders might like to raise some of those at her next AGM.
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