In an open letter sent to news organizations and the board of Hewlett-Packard Company (NYSE:HPQ), the founder and former CEO of Autonomy Corp. asked Hewlett-Packard to specify its allegations of serious accounting improprieties at Autonomy that caused an $8.8 billion writedown. He also called on the Hewlett-Packard board to provide him with a copy of the documents and interim reports that they provided to Britain's Serious Fraud Office and the SEC in the United States.
By appealing directly to the HP board, Lynch bypassed Hewlett-Packard Company (NYSE:HPQ) chief executive Meg Whitman, who fired him from Autonomy for poor performance. On November 20, HP alleged that some of the former Autonomy executives inflated and misrepresented the financial performance of the British software company before the $11.1 billion acquisition last year.
Hewlett-Packard said it found accounting improprieties and outright misrepresentations after a senior Autonomy member came forward. The company has brought the issue to the regulators in the United Kingdom and the United States. The US computer maker said last week that it found $200 million in falsified sales. HP has been sued by investors over the Autonomy fraud scandal. In its fourth quarter earnings report, Hewlett-Packard Company (NYSE:HPQ) said that $5 billion of the $8.8 billion write-down was related to the Autonomy acquisition.
“Autonomy’s finances, during its years as a public company and including the time period in question, were handled in accordance with applicable regulations and accounting practices,” Lynch said in his letter. “I utterly reject all allegations of impropriety.”
Lynch asked the Hewlett-Packard board to publish the detailed calculations behind the $5 billion writedown related to Autonomy. “Having no details beyond the limited public information provided last week, and still with no further contact from you, I am writing today to ask you, the board of Hewlett-Packard Company (NYSE:HPQ), for immediate and specific explanations for the allegations HP is making,” Lynch wrote in his letter.
Autonomy is a Cambridge, Britain-based enterprise software developer. Hewlett-Packard Company (NYSE:HPQ) acquired it in August 2011 to compete with International Business Machines Corp. (NYSE:IBM) and Oracle Corporation (NASDAQ:ORCL).