British watchdog launches probe of Autonomy
Hewlett-Packard, which bought the British software maker in 2011, claims it was misled in paying a price far higher than the firm’s market value.
The Associated Press
LONDON — Britain’s accounting watchdog announced Monday it is investigating the books of British business-software maker Autonomy in the period before Hewlett-Packard bought it in 2011.
In a brief statement, the Financial Reporting Council (FRC) said it had launched an investigation “into the published financial reporting of Autonomy for the period between 1 January 2009 and 30 June 2011.”
The council has the power to impose fines and other sanctions.
HP bought Autonomy for
$10 billion but later alleged it had been misled into paying a price 64 percent above the firm’s market value.
In November, HP took an
$8.8 billion write-down for the acquisition, with more than
$5 billion of that due to alleged “accounting improprieties.”
It was one of several loss-making purchases for the tech giant, which has struggled to reinvent itself as PC and printer sales fall.
Among other things, Autonomy made search engines that help companies find vital data stored across computer networks. Acquiring it was part of an attempt by HP to strengthen its portfolio of high-value products and services for corporations and government agencies.
Former Autonomy CEO Mike Lynch has denied HP’s claims.
In a statement, a representative of Autonomy’s former management said they welcomed the investigation.
“As a member of the FTSE 100, the accounts of Autonomy have previously been reviewed by the FRC, including during the period in question, and no actions or changes were recommended or required,” it said.
“Autonomy received unqualified audit reports throughout its life as a public company. ... We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the FRC.”