TWO OF THE BIG FOUR AUDITING FIRMS, Deloitte and KPMG have been sued by HP shareholders over their roles in the purchase of Autonomy by HP.
Last week HP announced a multi-billion dollar writedown on its buyout of UK company Autonomy a year ago, and accused Autonomy's management of cooking the books to inflate the firm's value. Now Deloitte, which audited Autonomy's accounts and KPMG, which was part of the team that carried out the due diligence on the purchase of Autonomy have been named as defendants in a shareholder lawsuit.
Last week HP was hit with a shareholder lawsuit, with former CEO Leo Apotheker and CEO Meg Whitman named along with CFO Catherine Lesjak. Now Deloitte, which was named during a conference call conducted by Whitman last week, and KPMG have been added to the lawsuit.
Deloitte previously said it had no knowledge of any "accounting improprieties or misrepresentations" in Autonomy's accounts. During Whitman's call she said that Deloitte wasn't a "brand X accountancy firm", implying that HP's board had little reason to doubt accounts that had been signed off by the firm.
KPMG said the firm provided only a limited amount of non-audit work for HP, and told Reuters that it was confident that the firm had "acted responsibly and with integrity". Given HP's strongly worded statements last week and the size of the writedown it was almost inevitable that the two firms and those HP executives responsible for the deal would be snared in litigation.
HP said it will try to claw back money for its shareholders, but given that all of the parties involved can afford teams of lawyers, it seems unlikely that HP shareholders will see a penny back anytime soon. µ