Autonomy claims by HP disputed

The war of words over Hewlett-Packard’s allegation that it was duped into paying billions of dollars too much for software company Autonomy intensified Tuesday with an angry letter from Autonomy’s former CEO.

Mike Lynch, who last week denied HP’s accusation that the British software firm’s value had been misrepresented before the Palo Alto company paid $11 billion for it last year, demanded that HP’s board prove its claims.

Asserting that Autonomy’s finances had been “handled in accordance with applicable regulations and accounting practices,” Lynch asked HP’s board to provide him with “immediate and specific explanations for the allegations HP is making.””

Among other information, Lynch asked HP to give him:

  • “The calculations used” to determine the $5 billion write down  that HP has attributed directly to its purchase of Autonomy, adding that many observers “fail to understand how HP reaches that number.”
  • Details on HP’s claim that some hardware sales by Autonomy had been mischaracterized, since Lynch said those sales shouldn’t have significantly  affected Autonomy’s value.
  • A more detailed explanation of how HP could have failed to understand Autonomy’s true value when it was buying the company.

Lynch added in his letter that he has been “shocked and appalled by the events of the past week.”

In response, HP issued a statement noting that “while Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders. In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury.”

HP has referred its allegations to U.S. and British regulatory authorities.






Share this Post