The Serious Fraud Office (SFO) has closed its investigation into the ill-fated sale of Autonomy to Hewlett-Packard in 2011, claiming it couldn't find enough evidence to secure a conviction of the software firm's former executives.
Autonomy was intended to be the US$11.1 billion centrepiece of a shift into software for HP, but the deal turned sour a year later when it wrote off three quarters of Autonomy's value.
HP alleged "some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures" to inflate the company's apparent worth by more than US$5 billion.
Autonomy's former management, including company founder Mike Lynch, has denied the allegations.
HP said it passed information supporting its claims from an unidentified whistleblower to the US Department of Justice, the Securities and Exchange Commission and the SFO.
The SFO, which started its investigation in early 2013, said: "In respect of some aspects of the allegations, the SFO has concluded that, on the information available to it, there is insufficient evidence for a realistic prospect of conviction."
It said it had ceded jurisdiction over other aspects of the case to US authorities, whose investigation is ongoing.
Lynch, an Irish-born mathematician who led the firm when it was sold, welcomed the SFO decision.
"Let's remember, HP made allegations of a US$5 billion fraud, and presented the case in public as a slam dunk," he said in a statement on Monday.
"HP now faces serious questions of its own about its conduct in this case and the false statements it has made."
HP said it remained "committed to holding the architects of the Autonomy fraud accountable".
"As the SFO made clear, the US authorities are continuing their investigation and we continue to co-operate with that investigation," a company spokeswoman said on Monday.
HP has said Autonomy's former management used numerous tactics to misrepresent its numbers and rate of growth, including recognising revenue on transactions that never closed and misidentifying categories of revenue to make Autonomy looks like a high growth company.
Autonomy's former management had said some of the claims are down to differences in interpretations of accounting standards, while HP was aware of how it categorised revenue.
Fallout from the deal included the departure of two Hewlett-Packard directors, and prompted chairman Ray Lane to give up that post. It also included criminal and civil probes by authorities in the United States and United Kingdom.