City on alert as SFO opens inquiry into Autonomy

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The Independent Online

A string of City firms which advised UK technology company Autonomy before its sale to Hewlett Packard are on alert after it emerged that the Serious Fraud Office has begun a criminal inquiry into possible accounting improprieties. The SFO officially notified HP about the investigation on 6 February, but it has only been revealed now in a stock market filing by the United States computing giant.

"It is , of course, right to point out that the opening of a criminal investigation does not mean that individuals are guilty of a crime or indeed that a crime has been committed," said the SFO.

The SFO did not name any individuals or companies.

To complicate matters, the UK fraud watchdog is having to check first whether it can continue as the investigating body because it uses an Autonomy product, called Introspect, as a management tool. The SFO said it needs "to ensure that there is now no conflict of interest".

HP bought the FTSE 100 company Autonomy for $10.3bn (£6.9bn) in 2011, but it wrote off £8bn last autumn.

Autonomy's founder and former chief executive, Mike Lynch, and finance director, Sushovan Hussain, have denied wrongdoing.

Qatalyst Partners, led by top banker Frank Quattrone, was lead financial adviser on the sale while Deloitte signed off Autonomy's accounts in 2011. There is no suggestion that these two firms were aware of any problems.