Investors sue HP over Autonomy acquisition
Following IT giant’s $5bn write-down of acquired company HP investors file lawsuit for loss of earnings
HP INVESTORS have filed a lawsuit against the IT giant following the revelation it overvalued Autonomy by billions of dollars.
The legal claim, which was filed this week in San Fransisco, alleges that HP knew that statements from its Autonomy acquisition were misleading, which led to the write-down, Reuters.com reports.
The legal claim asks for trial by jury and for damages to be awarded.
HP declined to comment on the issue.
HP paid $11bn for the company in August last year and just 15 months later was forced to write down $8.8bn (£5.4bn), of which $5bn was linked to the Autonomy deal.
The IT giant claimed the revelation came to light after a PwC forensic review of Autonomy’s accounting practices following a whistleblower’s accusations of accounting irregularities.
The review was part of an investigation HP said was sparked by a whistleblower from Autonomy, described as a “senior member of its leadership team”, who said there were “questionable accounting practices” at the UK business prior to its acquisition.
In the lawsuit, it is alleged that HP hid the fact that it had gained control of the UK company based on financial statements which could not be trusted.
Deloitte conducted an audit of the accounts, with HP CEO Meg Whitman claiming KPMG conducted due diligence work, which included checking the work of the auditor, prior to the acquisition.
A spokesman for KPMG said: “KPMG performed limited non-audit work for HP on this matter. Because of our professional obligations and client confidentiality, we cannot discuss our engagement further without HP’s consent.”
Deloitte has defended its audit work at the UK technology company Autonomy.
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“Deloitte categorically denies that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy’s financial statements at the time of the write-down announcement,” said a Deloitte spokesman.
“We conducted our audit work in full compliance with regulation and professional standards.”
Citigroup analysts have criticised the way financial reporting is policed by the accounting watchdog following the Autonomy and HP issues.