Autonomy founder Mike Lynch has written to Hewlett Packard shareholders ahead of the company’s annual meeting today, calling for them to ask questions about “misleading” allegations made by HP’s management.
Almost a year and a half ago HP accused Lynch and Autonomy’s former management of “serious accounting improprieties”. HP said misstatement of earnings forced it to take an $8.8 billion (£5.2 billion) writedown on the enterprise software business, which it bought for $10.2 billion in 2011.
Lynch, pictured, has always denied any wrongdoing, claiming the writedown came about due to a misunderstanding of international accounting rules.
In his letter today, Lynch said he has “serious concerns about the way HP has conducted this affair.”
He alleged: “The evidence shows that HP is not just smearing us [Autonomy’s former management], but also misleading you, its shareholders.”
Lynch claims HP was aware of the accounting practices that it has since disputed and alleges independent valuation reports carried out at the time of the takeover confirm this. He is asking shareholders to “help put things right” by asking questions at today’s AGM about how much HP’s management knew about the accounting practices and why it has not released evidence relating to the allegations.
HP has said it cannot publish evidence because the issue is “with the regulators”. Both UK and US financial authorities are understood to be investigating the case.
HP claimed last month its investigations revealed Autonomy made 80% less profits and had 54% less revenue than stated.
HP and boss Meg Whitman face a class-action lawsuit in the US brought by shareholders, alleging Whitman knew about alleged fraud earlier than disclosed to investors.
For its part, the company said: “As HP has previously reported, it uncovered numerous accounting irregularities at Autonomy prior to its acquisition by HP. HP reported those irregularities to appropriate civil and criminal regulators in the US and UK.”
