Claim and counter claim
The long-running saga of the acquisition of UK firm Autonomy by technology giant Hewlett-Packard (HP) has taken a new turn this week after new details of HP’s $5.1bn (£3.6bn) lawsuit have emerged in a court filing. In the documents, HP accuses two former Autonomy executives of artificially boosting the company’s revenue in a deliberate bid to acquire more money in the buy-out. However, Mike Lynch, Autonomy’s founder and Sushovan Hussain, its former Chief Financial Officer, claim that HP is merely looking for a scapegoat. A copy of the Particulars of Claim is now publicly available in the High Court in London.
Amongst HP’s charges are that Mr Lynch and Mr Hussain engaged in ‘improper accounting practices’ that artificially inflated the value of the firm ahead of its acquisition by HP in 2011, which ultimately forced the larger firm to write down around 80 per cent of the $11bn that it spent on acquiring Autonomy.
In a press release this week, HP repeated its previous allegations made against the two former executives but accompanied the statement by no less than 14 separate documents that purport to confirm that its claims are true. This is likely to be the result of painstaking research by forensic accountants, who will have pored over every figure in every piece of communication issued by Autonomy prior to its sale.
However, the pair dismissed HP’s claims as ‘baseless’ and have sent the court their own accompanying documentation, saying in a letter that HP’s ‘patchwork tale of alleged misconduct rests on a faulty foundation of false facts, unsupported inferences and a misunderstanding and misappropriation of the relevant legal and accounting standards.
Author: Roger Isaacs, 11 May 2015
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