Autonomy under SFO investigation
THE Serious Fraud Office is investigating allegations of accounting improprieties at Autonomy, according to Hewlett-Packard, which acquired the UK software maker in 2011.
The disclosure last night from HP comes as the $11.1bn (£7.5bn) purchase of Autonomy looks set to dominate the PC maker's annual shareholder meeting in California later this week.
In a filing with US financial regulators, HP said the SFO informed it on February 6 that it had opened an investigation into HP's allegations that it was forced to overpay for Autonomy in August 2011.
Designed to cut HP's dependence on a shrinking PC market, the acquisition of Autonomy cost former chief executive Leo Apotheker his job and has angered shareholders. HP wrote down the value of Autonomy, which was founded by entrepreneur Mike Lynch, by $8.8bn late last year. Autonomy's former management denies any improper accounting.
The purchase, alongside the poor performance of HP's shares, has prompted calls for the company's chairman, Ray Lane and other HP board members to step down. ISS and Glass Lewis, two leading advisers to US fund managers on corporate governance, have each recommended that shareholders vote against the re-election of a number of HP board members.
Last night, the board's lead independent director defended the roles of Mr Lane and fellow board members John Hammergren and Kennedy Thompson. "Losing some of our directors in an abrupt and disorderly manner could undermine our efforts to stabilise the company," said board member Rajiv Gupta. "What the company needs now is stability and consistency of leadership."
The SFO joins the US Securities and Exchange Commission and the Financial Reporting Council, the UK's accounting watchdog, in investigating the allegations.
Despite the allegations HP has made over Autonomy, chief executive Meg Whitman has insisted that it remains a vital part of the company's future.
Autonomy's software is designed to help companies order and search the ever increasing amounts of data they generate through emails and other digital communication.
Shares in HP closed up 0.8pc at $21.07 in New York.