All the latest UK technology news, reviews and analysis

HP defends Autonomy acquisition checks despite $8.8bn loss

20 Nov 2012
HP's Meg Whitman

HP's chief executive Meg Whitman has defended the firm's acquisition processes during its $10bn purchase of UK firm Autonomy after serious accounting irregularities and improprieties have come to light, costing the firm $8.8bn in write-downs.

The revelations came to light on Tuesday during HP's fourth quarter earnings for 2012, in which it accused management at Autonomy of "accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company".

Speaking on a conference call Whitman said the firm had carried out all necessary checks on the firm in conjunctions with major accounting and consultancy firms like KPMG and Deloitte prior to the deal.

"We had no idea there were any misrepresentations going on prior to the individual coming forward after Mike Lynch was let go after our Q2 earnings," she said.

She went on to say it was almost impossible for the firm, or those it hired to oversee the deal, to uncover the problems, as they were being lied to about the reality of many of the figures on Autonomy's books.

This including using sales to value added resellers (VARs) as actual customer deals and rejigging long-term customer deals gained during acquisitions into what appeared to be new sales.

The firm is now pursuing actions through both civil and criminal courts against those it believes responsible, although it refused to name any individuals.

HP said it hopes to try and gain back as much lost revenue from the write-down as possible for shareholders

Despite this, Whitman said HP remains committed to the use of Autonomy's technology across the company.

"We have confirmed with hands on experience over the year it's [its technology] cutting edge and offers many unique solutions to computing challenges faced by businesses," she said.

Nevertheless, with hardware PC sales slumping in the face of tablets, and HP's profits shrinking, forcing massive layoffs, the huge shock of the claims made about Autonomy's financials practices prior to the acquisition add yet another major headache to Whitman's workload.

  • Comment  
  • Tweet  
  • Google plus  
  • Facebook  
  • LinkedIn  
  • Stumble Upon  
Dan Worth

Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal

View Dan's Google+ profile

More on Finance
What do you think?
blog comments powered by Disqus

Windows 7 end of mainstream support

What are your plans for when Microsoft ends mainstream support for Windows 7 in January 2015?

Popular Threads

Powered by Disqus
LG G3 in gold black and white

LG G3 vs Galaxy S5 video

We pit the two Korean firms' flagship smartphones against each other

Updating your subscription status Loading

Get the latest news (daily or weekly) direct to your inbox with V3 newsletters.

newsletter sign-up button

Getting started with virtualisation

Virtualisation can help you reduce costs, improve application availability, and simplify IT
management. However, getting started can be challenging


Converting big data and analytics insights into results

Successful leaders are infusing analytics throughout their organisations to drive smarter decisions, enable faster actions and optimise outcomes

2014 Financial Software Development - London - Entry Level

Do you want to write industry-leading software relied...

SAP EWM Consultant

SAP EWM Consultant required for a large international...

Junior Graduate .Net Developer - ASP.Net / C# / HTML / CSS

Junior Graduate .Net Developer - ASP.Net / C# / HTML...

Junior Graduate .Net Developer - ASP.Net / C# / HTML / CSS

Junior Graduate .Net Developer - ASP.Net / C# / HTML...
To send to more than one email address, simply separate each address with a comma.