The legal saga between HP and the former management of Autonomy has taken another twist after new information has cast more doubt on the acquisition and its subsequent fallout.
HP claims that Autonomy “resold generic hardware at a loss” to mask its real financial performance and engaged in “improper transactions” with resellers to create the appearance of increased software licensing sales for a financial quarter.
"In some instances, these transactions were used to accelerate revenue, and on numerous occasions, these were fabricated transactions with no real end user," it added.
It claims this information only came to light once a whistleblower came forward in May 2012, around nine months after the deal for the company was completed.
HP eventually went public with the allegations in November 2012, when it took a huge $8.8bn hit on Autonomy after CEO Meg Whitman said information came to light proving that the firm was overvalued. She said HP would be taking legal action as a result.
Mike Lynch, Autonomy's former chief executive, has always denied any wrongdoing, and the FT’s report appears to cast more confusion on exactly what was known when and by whom.
Lynch was keen to use the FT's claims as proof that the firm had always been open in its dealings and said pressure should now fall on Whitman to explain why this information had been kept secret for so long.
“Meg Whitman accused Autonomy of ‘active concealment’ but these revelations prove we were open and transparent with our auditors, who continue to stand by the accounts,” he said in a post on his website.
“Meg Whitman must answer to her shareholders with what she knew, when she knew it and how she and her senior colleagues made such factually incorrect and serious statements that were so easy to check from the audit packs. Why would Meg say we had withheld information from our auditors? She should explain or resign.”
However, HP has dismissed the report by reiterating that it was unaware of any issues until the whistleblower came forward. The firm also repeated claims that Autonomy was involved in several accounting practices that hid its financial performance.
"While HP eventually learned that a portion of Autonomy's revenues were related to hardware sales, we knew nothing of the accounting improprieties, misrepresentations and disclosure failures related to such sales until after a senior Autonomy executive came forward and HP conducted an extensive investigation," it said.
"Our investigation has shown that Autonomy often resold generic hardware at a loss in the last few days of the quarter with the sole purpose of masking its real financial performance."
Despite the legal and financial headaches the Autonomy deal has caused HP, the firm has been busy integrating its capabilities into its product line, with an update to the Idol platform announced last month to enhance its big data offerings.
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