Mike Lynch accuses Hewlett Packard of changing its story
Published 28/12/2012 | 16:24
Mike Lynch, the technology entrepreneur at loggerheads with Hewlett Packard over alleged accounting fraud at Autonomy, has accused the US computer giant of changing its story as it goes along.
HP claimed Autonomy had cooked its books, in explosive filings to America’s Securities and Exchange Commission last month, but has yet to disclose full details of the alleged wrongdoing.
Mr Lynch, who founded the Cambridge software firm and later sold it to HP for $10bn (€€7.6bn), vehemently denies the charges. On Friday he renewed calls for HP to tell him in detail where it thinks Autonomy went wrong, and accused the American business of making “material” changes to its position. He also revealed he has not had any contact from authorities investigating the case.
HP said in November that Autonomy had used serious accounting improprieties to “wilfully” misrepresent the business, which specialises in searching “unstructured data” such as voicemails, texts and videos.
It made the allegations as it made $8.8bn of write-downs, including $5bn on the value of Autonomy.
However, Mr Lynch said on Friday that, instead of explaining what it thought Autonomy had done, and making things more transparent, it had done the opposite and made it hard to decipher how much of the $5bn write-down on the Cambridge firm was due to the alleged accounting fraud.
“HP has again failed [to] publish any explanation of the serious allegations,” he said in a statement. “It is now less clear how much of the $5bn write-down is in fact being attributed to the alleged accounting issues, and how much to other changes in business performance and earnings projections. This appears to be a material change in HP’s allegations.”
The computer business, which until recently ranked as the biggest PC-maker in the world, was expected to publish full details of the allegations against Autonomy in its end of year filing with the SEC, amid pressure from investors and US legal experts.
However, it resisted doing so – other than to confirm that the US Department of Justice had opened a probe into the allegations of accounting fraud at Autonomy.
Government officials began the investigation last month, HP said in its filing.
Mr Lynch said on Friday that he has yet to be contacted by the DoJ, or by the Serious Fraud Office in the UK, which HP has also alerted to the matter.
“We have as yet had no contact from any regulatory authority. We will co-operate with any investigation and look forward to the opportunity to explain our position,” he said.
“We continue to reject these allegations in the strongest possible terms. Autonomy’s financial accounts were properly maintained in accordance with applicable regulations, fully audited by Deloitte, and available to HP during the due diligence process,” he added.