MAKER OF EXPENSIVE PRINTER INK HP has been sued by investors over its writedown of Autonomy.
Last week HP wrote off $8.8bn from the $10.3bn purchase price for British software vendor Autonomy, claiming that it had uncovered accounting problems that inflated Autonomy's worth. Now HP investors have filed a lawsuit against the firm claiming that it issued false and misleading statements.
HP CEO Meg Whitman and her predecessor Leo Apotheker have been named as defendants, while CFO Catherine Lesjak has also named in the lawsuit. The complaint filed with a federal court in San Francisco stated, "At the time Hewlett-Packard agreed in principle to acquire Autonomy, defendants were looking to unwind the deal in light of the accounting irregularities that plagued Autonomy's financial statements."
Whitman claimed that Autonomy's management participated in a "willful effort to mislead investors and potential buyers" by using "accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company". HP referred the matter to the US Securities and Exchange Commission and the UK Serious Fraud Office, and it has also been reported that the FBI is looking into the matter.
Mike Lynch, the CEO of Autonomy at the time of its sale to HP, has denied all of the allegations. HP on the other hand has said that it will try to recover as much of the cash it spent to buy Autonomy as it can, although that is likely to take years.
While HP's writedown of Autonomy didn't result in a physical loss of cash in the bank, HP stockholders saw the value of their investments fall considerably as the firm's share price fell to 10-year lows. The lawsuit seeks class action status and has not stated the amount of damages being claimed. µ