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SEC probes voting records in HP merger

Computer giant Hewlett Packard revealed yesterday that it is being investigated by two divisions of the US federal government over allegations that it pressured an investment bank into voting for its proposed merger.

The government’s inquiries represent the latest in a series of obstructions that HP faced since announcing plans to buy Compaq last September.

According to HP documents filed with the US Securities and Exchange Commission yesterday, now both the US Attorney’s Office for the Southern District of New York and the San Francisco office of the SEC have requested information regarding Deutsche Bank’s voting records.

While the SEC request is voluntary, the interest from the New York US Attorney’s Office comes in the form of a compulsory subpoena. In addition, the Attorney General’s office has also subpoenaed information regarding Northern Trust’s voting records.

The investigators’ interest in Northern Trust may have stemmed from a voice mail left by HP CEO Carly Fiorina just days before the shareholder vote. The message, leaked to the media last week, had Fiorina stating that HP might ‘have to do something extraordinary’ to sway both Deutsche Bank’s and Northern Trust’s votes.

After the shareholder vote at the Special Meeting, HP proclaimed a small but narrow victory. Within days, however, a suit filed by dissident HP board member Walter Hewlett accused the company of using financial inducements to win votes from Deutsche Bank.

HP has strongly denied the accusations and maintains the inquiry will not delay the merger. ‘We never acted improperly. We remain optimistic that we can close the merger on our current schedule,’ HP spokeswoman Judy Radlinsky said in a statement.

A Delaware judge recently ruled that Walter Hewlett could pursue his suit against the vote, over protests from HP. The trial begins April 23.

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