Right before Hewlett-Packard Company (NYSE:HPQ)’s annual shareholder meeting, Autonomy founder and former chief Mike Lynch increased pressure on Hewlett-Packard Co. (NYSE:HPQ) board of directors to provide more details about the alleged fraud in the British technology company before H-P acquired it in 2011. Lynch has denied the allegations several times in the past.
In an open letter to Hewlett-Packard shareholders, Lynch also asked Hewlett-Packard to disclose how it calculated the impairment charges of $8.8 billion related to Autonomy acquisition. Following the write-down H-P investors sued the technology giant for the accounting irregularities related to the $11.1 billion Autonomy acquisition.
Lynch asked the Hewlett-Packard Company (NYSE:HPQ) board to make their allegations public so that everybody can understand the nature of allegations and how it relates to the other decisions of H-P. He said H-P should provide the PwC reports which are the basis of its allegations. The disclosures will help stakeholders move towards a resolution.
Discussing again about the $8.8 billion write-down, Lynch noted that several regulators and commentators including former SEC chief accountant have raised questions on how accounting irregularities can result into such a huge write-down.
Mike Lynch told H-P shareholders that the former Autonomy management started alerting Hewlett-Packard Company (NYSE:HPQ) CEO Meg Whitman about significant problems in the integration of the two companies in as early as December 2011. The former Autonomy management had told H-P CEO that the integration might negatively affect the performance. When didn’t Whitman acknowledge that Autonomy didn’t perform as per expectations? In addition, why didn’t she communicate this with shareholders back then?
Lynch said he continues to reject all the allegations of Hewlett-Packard Company (NYSE:HPQ). He said H-P has aggressively made damaging accusations against Autonomy without giving any evidence. How could a company ask regulators to start the investigation without providing the details?
He reiterated that the problems in Autonomy acquisition are due to H-P’s mismanagement of Autonomy after acquisition. Deloitte had audited Autonomy’s accounts, and Deloitte publicly confirmed that it conducted the audit in full compliance with the regulations and professional standards.
There were also speculations that Hewlett-Packard Company (NYSE:HPQ) may consider selling Autonomy, but evidences suggest it won’t. H-P share price was up 1.25 percent to $23.40 at 12:07 PM.