Autonomy case dropped by SFO

The Serious Fraud Office has dropped its investigation into the sale of Autonomy to Hewlett Packard, saying that, on the information available, there is little realistic prospect of a conviction. However, HP is determined to continue with a separate case being brought in the US.  The case centred on the sale of software firm Autonomy to HP in 2011 when the hardware giant decided to diversify. HP spent £7bn on the British firm but in 2012 HP announced a writedown of $5bn amid allegations that it had been defrauded by Autonomy’s directors during the acquisition.

In fact, HP’s board said it had paid more money than it should have when it bought the UK firm as a result of "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy".  Then last year, HP said it would sue Autonomy’s former chief Financial Officer, Sushovan Hussain and the firm’s founder and former Chief Executive, Mike Lynch. However, Mr Lynch has always strenuously denied any wrongdoing, saying that HP had been aware of all the facts before completing the acquisition.

He then said that forensic investigators had unearthed an email that vindicated his position and welcomed the news from the SFO, saying that he had always maintained that HP’s allegations were false and that a two-year review of the material presented by HP had evidently led the SFO to the same conclusion.  However, a spokesperson for HP said that the company “remains committed to holding the architects of the Autonomy fraud accountable”, so presumably will keep forensic investigators on the case, which is still being conducted by the US Department of Justice, while the US Securities and Exchange Commission and the FBI are also thought to be running their own probes.

Author: Roger Isaacs, 23 January 2015

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