Little over a year after the $11.7 billion acquisition, the Silicon
Valley company wrote down the value of Autonomy by $8.8 billion,
accusing the management of accounting irregularities.
Autonomy was founded and led by British entrepreneur Mike Lynch, who
has repeatedly denied the allegations.
In the first specific allegation since the writedown, HP said it had
refiled 2010 accounts for Autonomy Systems Limited, one of its
British operating units, revising the annual revenue down by 54
percent to 81 million pounds.
Net profit for the period was reduced by 86 million pounds ($133
million) to 19.6 million pounds according to the filing, seen by
Reuters, that HP says it has made to Companies House — the
organization that registers UK companies.
The drop, $133 million at 2010 exchange rates, compares with
reported 2010 net profit for Autonomy as a whole of $217 million,
according to the company's annual report.
Lynch had previously said that differences in IFRS and U.S. GAAP
accounting standards appeared to have had a role in some of HP's
"The extensive investigations undertaken by Hewlett-Packard ... into
the past accounting practices of the group, have revealed extensive
errors (including misstatements) in the previously issued financial
statements," the revised accounts said.
HP, based in Palo Alto, California, has said it passed information
from an unidentified whistleblower to the U.S. Department of
Justice, the SEC and Britain's Serious Fraud Office. Until now,
however, few details had emerged about the nature of the alleged
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HP said most of the reduction in profits was due to "fundamental
errors", with the remainder put down to differences in accounting
policies used by HP and Autonomy.
Lynch's spokeswoman, Vanessa Colomar, said Lynch and the former
senior management of Autonomy rejected the allegation of overstated
profits which was contained in the refiled accounts. Colomar added
that the size of the adjustments in the 2010 results did not fit
with the scale of HP's $5 billion writedown.
"We continue to reject these allegations by HP," she said.
(Reporting by Kate Holton and Paul
Sandle; editing by Ruth Pitchford)
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