Autonomy Corporation (Photo credit: Wikipedia)
Autonomy's founder is hitting back at HP after it was alleged that his firm, a knowledge management and enterprise search company, adopted dubious accountancy practices to boost its' value before it was sold to HP, during August of 2011. In a WSJ (Wall Street Journal) interview, Lynch stated that HP's accusations were "completely and utterly" false and that he totally rejected them.
Earlier today, HP disclosed that it plans to make an $8.8 billion charge for impairment, because of what it claims were "serious" accountancy misrepresentations, improprieties and failures of transparency by Autonomy, during the lead up to the sale. HP states that a "senior" Autonomy executive spoke to them once Lynch departed the firm, prompting a thorough examination of Autonomy's accountancy procedures.
In the Wall Street Journal, Lynch says that he was unaware of HP's accusations, prior to them being made public today. He highlights the fact that Autonomy is audited every three months, and that HP carried out comprehensive research into Autonomy in advance of the sale.
According to Lynch, the idea that Autonomy would have been able to trick HP into thinking that their firm was worth $9 billion more than its' true value is ridiculous. Lynch points out that there were hundreds of people and several companies carrying out due diligence before the acquisition, so someone would have been bound to spot any impropriety. Also, Lynch says that the allegations seem to coincide with HP announcing its' worst set of sales figures in the seventy year history of the company.
Lynch looks intent on defending himself, and his previous firm, against HP's accusations. HP said in its statement today that it will "seek redress" against particular parties in a civil court, to reclaim as much as possible for its' shareholders. The impending lawsuits should soon shed more light on this matter.