Hewlett-Packard Now Faces The U.K.’s Serious Fraud Office

Hewlett-Packard Now Faces The U.K.’s Serious Fraud Office
<a href="https://pixabay.com/users/1588877/">1588877</a> / Pixabay

Hewlett-Packard Company (NYSE:HPQ) continues to be plagued by its 2011 acquisition of Autonomy Corp. This time it’s regulators in the U.K.’s Serious Fraud Office who are looking into the deal. In the U.S., the FBI, the Securities and Exchange Commission and the Department of Justice are all investigating the deal between the two companies. Investors also sued the PC maker over it.

Hewlett-Packard Now Faces The U.K.'s Serious Fraud Office

The company reported this latest investigation by the U.K.’s Serious Fraud Office in its latest regulatory filing. The U.K.’s Financial Reporting Council began investigating the deal last month. Hewlett-Packard Company (NYSE:HPQ) said it is cooperating and providing information to the agencies which are looking into the transaction in connection with the allegations of accounting improprieties at Autonomy.

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Hewlett-Packard acquired Autonomy for $11 billion, which was about 11 times its annual earnings. HP has had to take an $8.8 billion charge against its own earnings as a result of the controversy. Executives at both companies are arguing about where the blame lies when it comes to HP’s disappointing fourth quarter earnings.

In November, Hewlett-Packard Company (NYSE:HPQ) said it found evidence of accounting improprieties at Autonomy prior to its acquisition of the company. Approximately $200 million in revenue had been recorded improperly at Autonomy, according to HP’s general counsel.

Bloomberg reports that Autonomy’s former executives are gearing up for what could be a lengthy legal battle. Former CEO Mike Lynch has reportedly hired well-known criminal defense attorney Reid Weingarten, who has represented former WorldCom chairman Bernard Ebbers and Goldman Sachs Group, Inc. (NYSE:GS) CEO Lloyd Blankfein. The company’s former CFO, Sushovan Hussain, has apparently retained high profile attorney John Kreker, who is working with The McGraw-Hill Companies, Inc. (NYSE:MHP) on fraud allegations involving its Standard & Poor’s Rating Services.

Meanwhile investor advisors are urging Hewlett-Packard Company (NYSE:HPQ)’s shareholders to vote against reelecting chairman Ray Lane and other executives, saying that they didn’t vet the purchase properly.

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