Friday 19 January 2018

Threat to probe as investigators use firm's software

Peter Flanagan New Technology Correspondent

A UK fraud investigation into Autonomy, a company set up by an Irish entrepreneur, threatened to descend into farce after it emerged regulators use one of Autonomy's products.

The Serious Fraud Office in the UK confirmed it had begun an investigation into the sale of Autonomy, which was set up by Leitrim native Mike Lynch, to Hewlett Packard in 2011.

HP paid just over $11bn (€8.3bn) for the company but last year wrote off more than $5bn of that and claimed it had found evidence of accounting irregularities within the group.

Mr Lynch has strenuously denied the allegations, claiming HP was "closely involved" with the running of Autonomy after the takeover.

In a statement yesterday, the SFO confirmed it had decided to open an investigation into allegations surrounding HP's takeover, but as it is an Autonomy customer it may not be able to proceed.

"The director of the Serious Fraud Office has decided to open an investigation into those allegations, with a view to using its powers of investigation to allow them to be tested.

"It is, of course, right to point out that the opening of a criminal investigation does not mean that individuals are guilty of a crime or indeed that a crime has been committed.

"It has also been reported that the SFO uses an Autonomy product, Introspect, as a document management tool.

"The SFO is keen to ensure that there is now no conflict of interest, or perception of such a conflict, and it is obliged as a first step to make inquiries to ensure that it can continue as the investigating body. It is undertaking this work at present," it added.

If the SFO decides it cannot carry out the investigation it would be a blow to HP's campaign to claw back some of the money it paid to Autonomy.

Mr Lynch picked up an estimated £600m (€686m) from the deal, while last year's write- off cost new HP chief executive Meg Whitman a huge amount of political capital inside the company.

Last week, the proxy adviser, Institutional Shareholder Services, recommended HP drop chairman Ray Lane over the deal's failure.

Irish Independent

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