Mark Hurd to quit after HP sexual harassment probe

Mark Hurd has admitted to 'financial irregularities'

Mark Hurd, the chief executive of HP, has announced that he will resign from his position after a sexual harassment probe.

The HP board has appointed chief financial officer Cathie Lesjak as interim chief executive, but she has ruled herself out of the top job on a permanent basis.

Hurd said in a statement that he had been the subject of an investigation into alleged harassment of a contractor. The probe had cleared him, but found that he had broken HP's Standards of Business Conduct.

"As the investigation progressed, I realised there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career," Hurd said.

Mark Holston, HP's general counsel, said during a conference call that Hurd had charged expenses to the company while having a personal relationship with a female marketing contractor between 2007 and 2009. The expenses reportedly ranged from $1,000 to $20,000 (£625 to £12,535).

"It was not the dollar amount of the expenses that drove the board's decision," said Holston. "It was a systematic pattern of improper expenses and inaccurate reports, and the disregard for the values of HP that Mark admitted he did not live up to."

Gloria Allred, a Los Angeles lawyer who has won several major discrimination cases, is representing the contractor and issued a statement that at no time did her client have an affair with Hurd.

The contractor contacted HP about a claim for discrimination on 29 June and the company launched an investigation. It found no case for sexual harassment but did find the financial irregularities.

"The board investigation found that Mark demonstrated a profound lack of judgement that seriously undermined his credibility and damaged his effectiveness in leading HP, and Mark agreed," said Holston.

Hurd is understood to have agreed to repay the money. According to the terms of his resignation, he will receive an immediate payment of $12,224,693 (£7,662,800) and various stock options.