HP Hit By Fresh Lawsuit Over Troubled Autonomy Deal
HP’s headaches continue after it faces a fresh Autonomy lawsuit, and is accused of knowing it was a bad deal
According to a report in The Guardian, Apotheker was influenced to pursue the deal by “self-interested auditors, Wall Street bankers and other investment advisers who facilitated HP’s severely reckless pursuit of Autonomy in exchange for nearly $100m (£65m) in fees.” The lawsuit also accuses Lynch of allegedly hoping to get out from under Autonomy before any accounting discrepancies were discovered and the company failed.
Shareholders in the lawsuit also claim that HP executives and directors – including Whitman – knew before the deal closed about Autonomy’s accounting issues from whistleblowers and reports by journalists and analysts. Still, HP’s due diligence in vetting Autonomy’s financial books lasted only three weeks, the shareholders say in the lawsuit.
At the same time – “unbeknownst to investors,” according to the court documents – HP was trying to back out of the deal before the 3 October, 2011, deadline. However, Lane was told by advisers from Barclay and Perella that because HP’s board knew of allegations against Autonomy of financial irregularities before making the offer, UK regulators would not let HP get out of the deal.
The court documents also outline several ways Autonomy executives allegedly made the company’s financial numbers look better than they really were.
The lawsuit was not the first one filed against HP in connection with the Autonomy deal; a week after the tech giant announced the $8.8 billion write-down, another shareholder sued HP.
Despite the problems and bad publicity caused by the Autonomy deal, Whitman in April said in a news conference that Autonomy is an important part of HP’s future and that – despite speculation – she had no intention of shutting down or selling off Autonomy or any other part of HP’s business.
“We remain committed to Autonomy; we remain committed to the brand, to Cambridge, to the UK,” she said. “It is an almost magical technology. … It plays into a big shift in the market, the area of big data, which HP should be in.”
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Originally published on eWeek.
