HP Says Gov't Investigating Troubled Autonomy Unit
Autonomy, the British business software company now owned by Hewlett-Packard, is facing a Justice Department investigation over improper accounting under previous management, according to HP.
In a filing with the Securities and Exchange Commission late Thursday, HP said Justice officials had informed the company on Nov. 21 that they were opening an investigation into the allegations, which HP said in November that it had uncovered after a senior Autonomy executive came forward. HP also reiterated that it provided information to the SEC and the U.K. Serious Fraud Office related to "accounting improprieties, disclosure failures and misrepresentations at Autonomy."
Justice officials had no comment.
HP, which acquired Autonomy for $10 billion in 2011, took an $8.8 billion charge to reflect that the U.K. company isn't worth what it paid. HP says about $5 billion of that charge stemmed from improper accounting.
Autonomy founder and former CEO Mike Lynch has said the allegations are false. He responded in a statement Thursday that HP had yet to provide a detailed calculation of that $5 billion or provide any explanation of the allegations. The statement was posted online at Forbes magazine's website.
The Autonomy mess has deepened a steep decline in HP's stock price, which has cut the Palo Alto, California, company's market value by nearly half this year. HP had already been struggling because its personal computer and printer businesses have been faltering as more people buy smartphones and tablet computers.
HP's stock fell 28 cents, or 2 percent, to $13.76 in morning trading Friday.