Autonomy's Mike Lynch: HP should back up claims
- 27 November 2012
- From the section Business
The former head of Autonomy, the UK group accused of misrepresenting its finances by US computer maker Hewlett-Packard, has demanded details of the allegations.
HP bought software group Autonomy in 2011 but said last week the UK firm seemed to have "inflated" its value, leading to a $5bn (£3bn) charge.
Mike Lynch said he was "shocked and appalled" by the allegations.
In an open letter, he said that HP had still failed to contact him.
"I am writing today to ask you, the board of HP, for immediate and specific explanations for the allegations HP is making," Mr Lynch said.
"HP should provide me with the interim report and any other documents which you say you have provided to the SEC and the SFO so that I can answer whatever is alleged, instead of the selective disclosure of non-material information via background discussions with the media."
Mr Lynch was referring to the fact that HP has asked US and UK authorities to investigate alleged misrepresentations of Autonomy's finances before HP took over the company last year.
'Penalty of perjury'
Responding, HP told the BBC: "The matter is in the hands of the authorities, including the UK Serious Fraud Office, the US Securities and Exchange Commission's Enforcement Division and the US Department of Justice, and we will defer to them as to how they wish to engage with Dr Lynch.
"While Dr Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders. In that setting, we look forward to hearing Dr Lynch and other former Autonomy employees answer questions under penalty of perjury."
Autonomy was founded by Mike Lynch in 1996 and grew to become one of the largest software companies in the UK. HP completed the takeover of Autonomy for $12bn in October last year.
Mr Lynch has denied all the allegations since they were made earlier this month.
In his open letter to the HP board, Mr Lynch also questioned the size of the $5bn charge and asked further questions of HP management, which has struggled to turn around the struggling PC maker.
"Can HP really state that no part of the $5bn writedown was, or should be, attributed to HP's operational and financial mismanagement of Autonomy since the acquisition?
"In order to justify a $5bn accounting writedown, a significant amount of revenue must be involved," he added. "Please explain how such issues could possibly have gone undetected during the extensive acquisition due diligence process and HP's financial oversight of Autonomy for a year from acquisition until October 2012."
Mr Lynch is a non-executive director of the BBC.