UK software firm Autonomy probed over Hewlett-Packard fraud claims
HP bought the Cambridge-based software maker for $10bn in 2011 and then wrote off $8.8bn late last year in a move that stunned Wall Street.
Tuesday 12 March 2013
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The Serious Fraud Office (SFO) is investigating computer giant Hewlett-Packard's claim that it was duped when it bought UK-based business software maker Autonomy, according to regulatory documents.
The SFO inquiry is the latest legal fallout from a deal that has saddled Hewlett-Packard with massive losses and depressed its stock price.
The US Justice Department started looking into the matter late last year, shortly after HP accused Autonomy employees of fabricating sales in an alleged ruse that drove up the company's sale price.
Autonomy's founder and former chief executive Mike Lynch has strenuously denied HP's claims and demanded that the company provides more evidence to support its allegations.
HP, based in Palo Alto, California, has repeatedly said that it is co-operating with legal authorities looking into the claims.
It bought Cambridge-based Autonomy for about 10 billion dollars (£6.7bn) in 2011 and then wrote off 8.8 billion (£5.9bn) of that amount late last year in a move that stunned Wall Street.
At least eight lawsuits have been filed by HP shareholders claiming that the company's board and management botched the Autonomy deal and concealed vital information before the staggering write-off.
The backlash also threatens to upend HP's board. Two shareholder advisory firms are recommending votes against the re-election of HP's two longest-serving directors, John Hammergren and Kennedy Thompson, at the company's annual meeting on March 20.
Institutional Shareholder Services and Glass Lewis & Co say the two directors should be ousted for shoddy oversight of the Autonomy deal and other recent HP acquisitions that have turned out badly.
ISS also is recommending HP shareholders oppose the re-election of company chairman Ray Lane. Glass Lewis is pushing for the removal of two other HP directors, Marc Andreessen and Rajiv Gupta, whose tenures on the board are the next longest after Mr Hammergren and Mr Thompson.
In a separate regulatory filing yesterday, HP urged shareholders to re-elect all 11 board members.
"Losing some of our directors in an abrupt and disorderly manner could undermine our efforts to stabilise the company," Mr Gupta, the lead independent director on HP's board, warned in a letter to shareholders.
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