Suffolk/UK: Software entrepreneur Mike Lynch, founder of Autonomy, calls for transparency over claims ahead of Hewlett-Packard AGM
A Suffolk software entrepreneur and his former management team have called for transparency over allegations made against them ahead of a meeting in the US today.
The UK’s Serious Fraud Office last week confirmed that it is investigating computer giant Hewlett-Packard’s (HP) claim that it was duped when it bought Cambridge-based software company Autonomy.
The US Justice Department started looking into the matter late last year, shortly after HP accused Autonomy employees of fabricating sales in an alleged ruse to drive up the company’s sale price ahead of the £7.1billion deal in 2011.
Autonomy’s founder and former chief executive, Mike Lynch, who lives in Suffolk, and other former senior managers at the company have strenuously denied HP’s claims and demanded that the company provides more evidence to support its allegations.
Now the former management team has written an open letter to the shareholders of HP, ahead of its annual general meeting this afternoon.
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“A significant issue for HP’s stakeholders is the allegations HP has made against the former management team of Autonomy in relation to the acquisition of that company, and the related impairment charge of $8.8 billion taken against shareholder funds,” writes Dr Lynch.
“As a member of the former management team of Autonomy I have a shared interest with the shareholders of HP (of which I am not one) in getting to the bottom of those allegations, understanding exactly what happened within HP related to this situation and resolving it as soon as possible.”
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A spokeswoman for HP said: “HP’s position is the same as it has been from the beginning. We have handed over our information of serious misrepresentations in autonomy’s accounting to the proper authorities, namely the SEC (the US Securities and Exchange Commission) and the Department of Justice and in the UK the SFO. We continue to cooperate and provide requested information to the relevant authorities on an ongoing basis.”
Last month, the UK’s accounting watchdog, the Financial Report Council, confirmed that it had begun a review of Autonomy’s accounts covering the period from January 2009 to June 2011 and news of the SFO’s involvement has now emerged in regulatory documents published in the United States.
The SFO said in a statement last week said the director of the Serious Fraud Office had decided to open an investigation into the allegations, with a view to using its powers of investigation to allow them to be tested.
“It is, of course, right to point out that the opening of a criminal investigation does not mean that individuals are guilty of a crime or indeed that a crime has been committed,” the SFO added.
Dr Lynch has hit out at the HP claims. His spokeswoman has argued they are “without merit” and “vague”.
HP, which is based based in Palo Alto, California, is itself facing a number of law suits from shareholders claiming that the group botched the Autonomy takeover.
The backlash could threaten the re-election of a number of HP board members at the group’s annual general meeting today.
The former Autonomy management team, in its open letter to shareholders today, calls on HP’s board of directors to answer a series of questions at the shareholder meeting. It is asking for HP to provide the evidence, including the PricewaterhouseCoopers report on which its allegations are based. It also wants to see the findings of a recently-appointed committee investigating the circumstances of the acquisition.