SFO halts investigation into Hewlett-Packard’s acquisition of Autonomy

Mike Lynch of Autonomy

Mike Lynch of Autonomy - Credit: Archant

The Serious Fraud Office has halted a two-year investigation into Hewlett-Packard’s disastrous acquisition of British software firm Autonomy.

Hewlett-Packard (HP) referred the 11.1billion US dollars (£7.3bn) deal to the Serious Fraud Office (SFO) after alleging that former members of Autonomy’s management “misled investors and potential buyers’’, causing it a hit of 8.8bn US dollars (£5.8bn).

But the SFO, which launched its investigation in March 2013, said today there was insufficient evidence for a realistic prospect of conviction.

It added: “In respect of other aspects and on the application of well-established principles, jurisdiction over the investigation has been ceded to the US authorities, whose investigation is ongoing.”

Autonomy was considered one of the UK’s biggest technology success stories, having pioneered software that helps companies to search data, particularly in cases involving compliance and legal issues. Clients included Procter & Gamble, Nestlé and Shell.

Autonomy’s Suffolk-based founder, Dr Mike Lynch, who received around £500million from the HP takeover in 2011, has always denied the allegations.

In a blog maintained by Dr Lynch on behalf of the former management team, he said: “We welcome the SFO’s decision to close its investigation.

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“As we have always said, HP’s allegations are false, and we are pleased that after a two-year review of the material presented by HP, the SFO has concluded that there is not a case to pursue.”

“Let’s remember, HP made allegations of a 5 billion US dollar fraud, and presented the case in public as a slam dunk. HP now faces serious questions of its own about its conduct in this case and the false statements it has made.”