Autonomy Chief Says Whitman Is Watering Down HP Fraud Claims

McGruber writes "Possibly the wierdest tax-writeoff of the year happened when Meg Whitman claimed that her US-based multinational corporation HP had been defrauded by British-software firm Autonomy; Ms. Whitman and HP claimed an 8.8 billion dollar write-down. As the Los Angeles Times explains, 'HP acquired Autonomy in 2011 for $11 billion, a move it hoped would turn it away from its dependence on sales of computer hardware with its low profit margins, and into the more profitable business of software. However, the price HP paid was widely criticized for being too high, and in part led to the subsequent ouster of Chief Executive Leo Apotheker.' The wierdness continues — in its annual report filed with the U.S. Securities and Exchange Commission, HP claims that the U.S. Department of Justice has opened an investigation into HP's allegations that HP has uncovered widespread accounting fraud at Autonomy. However, The Guardian points out that former Autonomy CEO Mike Lynch claims that HP 'is watering down the accusations it had levelled against him over the accounts filed by his old software company.' Mr. Lynch also says that he has not been contacted by the U.S. Department of Justice, which HP claims is investigating the alleged fraud. Perhaps Slashdot's users can help make sense of this mess and help explain it to me?"

Comments

Smoke and mirrors

[girlintraining]

Perhaps Slashdot's users can help make sense of this mess and help explain it to me?"

You don't have to delve too deeply into this one, to be honest. The company took a risk. It lost at the gambling table. Badly. And now it's looking for someone, or something, to blame. And the only way to reduce their debt load without screwing someone over a barrel is if some vaguely-defined "fraud" is found in the accounting books, thus saving HP of a lot of tax money and reducing the liability. Everything else is smoke and mirrors.

Re:Smoke and mirrors

[homey of my owney]

No, it does not cover the details of the confusing part.

Moreover, it incorrectly implies that Enterprise Services is Autonomy. The first hammer to fall in August was the write down of $8B for the acquisition of EDS --- NOT Autonomy. The November write down of $8.8B was for Autonomy.

The only thing clear here is that HP had a mess of losses associated with Enterprise Services, and that the first hint that things were really hosed was when they identified EDS as the reason for the first $8B+ write down.

Clown show

[Anonymous Coward]

On the sell side, we have this.

I'll let others comment on the buy side.

Re:HP used to be good

[deadgoon42]

You just hit the nail on the head of why customers and employees of once great companies now hate those companies. Their management knows little to nothing about the business itself, they only know how to look at a spreadsheet and run a trend chart. At my last job, we spent most of our time making charts go up and boxes turn green. These had little to no positive effect on our business and often just made things worse. If things got too bad, we'd just make up numbers or manipulate them in such a way as to make them what the managers wanted. Since the managers didn't know anything about the real world happenings, they were none the wiser. A terrible way to run a business, but it seems that's how most are run nowadays.