HP has confirmed in a regulatory filing that that the US Department of Justice has opened an investigation into alleged fraud at Autonomy, a business intelligence software supplier it acquired, prompting an immediate backlash from the founder of the company.
HP, which wrote down US$5 billion off its acquisition following an internal investigation into the matter, has accused the former management of Autonomy of cooking the books prior to the sale, told investors (page 157) it has made complaints to the UK Serious Fraud Office, the US Department of Justice and the US SEC.
News of the US investigation prompted a speedy response by Mike Lynch, the former CEO of Autonomy who has since left HP.
Lynch said he was yet to hear from US authorities but would co-operate with any investigation.
He lambasted HP for accusing the former management team in the media without providing any financial details behind why it wrote-down the value of the acquisition.
“These allegations are false,” he insisted. “We also do not understand why HP is raising these issues now given that Autonomy reported into the HP Finance team from the day the acquisition completed in October 2011, there was an extensive due diligence process and Autonomy was audited as a public company for many years.
“It is now less clear how much of the US$5 billion write-down is in fact being attributed to the alleged accounting issues, and how much to other changes in business performance and earnings projections,” he said.
Lynch laid out a number of arguments in his defense, reproduced in full below:
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