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HP takes 8.8 billion USD write-down on Autonomy acquisition

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Arab Today, arab today HP takes 8.8 billion USD write-down on Autonomy acquisition

San Francisco - XINHUA

Hewlett-Packard (HP) on Tuesday announced an 8.8-billion-U.S. dollar write-down of the value of Autonomy, a British software company it bought last year, accusing Autonomy of misrepresenting its financial performance. \"HP is extremely disappointed to find that some former members of Autonomy\'s management teamused accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy\'s acquisition by HP,\" said HP in a press release. \"These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management\'s ability to fairly value Autonomy at the time of the deal,\" it added. Among the 8.8-billion-dollar write-down, more than 5 billion dollars is linked to the alleged fraud discovered by an internal investigation by HP and forensic review into Autonomy\'s accounting practices prior to its acquisition by HP, the tech giant said in the release. HP announced to acquire Autonomy for 11.1 billion dollars in August 2011 and paid about 58 percent premium over the British company\'s share price at the time. The deal was announced when Leo Apotheker served as HP\'s chief executive officer (CEO) and concluded three weeks after current CEO Meg Whitman took over at the helm in October 2011. The alleged accounting fraud was disclosed by a senior Autonomy manager after the company\'s co-founder Mike Lynch left HP this May, Whitman said at a conference call Tuesday. She said Apotheker and Shane Robison, HP\'s former head of strategy, are to blame for missing Autonomy\'s accounting fraud. Whitman said HP has filed a complaint to the U.S. Securities and Exchange Commission (SEC) as well as British law enforcement and hoped the agencies will launch an investigation. HP also intends to file civil charges against Autonomy\'s former executives. The SEC is launching an investigation into the allegations, The Wall Street Journal reported Tuesday, citing a person familiar with the matter. Mike Lynch, Autonomy\'s former CEO, denied any irregularities. He told technology news site AllThingsD that he had been \"ambushed \" by HP\'s accusations, saying that he completely rejects the assertion of HP which is completely wrong. Former HP CEO Apotheker said he was \"stunned and disappointed\" to learn of Autonomy\'s alleged accounting improprieties. He noted in a statement that the due diligence process of the acquisition at the time was \"meticulous and thorough.\" The disclosure of Autonomy write-down delivered another blow to HP which is already struggling in the shrinking personal computer and printer market. In its latest quarterly earnings results released on Tuesday, due to the Autonomy write-down, HP reported a net loss of 6.9 billion dollars in the quarter which ended on Oct. 31. It was the second consecutive quarter of multi-billion dollar losses for HP. Early Tuesday, HP\'s stock fell to 11.35 dollars per share, its lowest level since October 2002.

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