PC giant Hewlett-Packard Co (HPQ) is preparing to launch another probe into the circumstances that led to the departure of former Chief Executive Mark Hurd, according to a recent court filing.
The investigation followed a shareholder lawsuit that alleged HP of wasting about $40 million in severance payment to Hurd, especially after an internal probe found he violated company's code of conduct by trying to hide a personal relationship with a contractor.
The probe will be conducted by outside lawyers and independent directors who joined HP's board after Hurd's departure, the filing added. According to the company website, only new Leo Apotheker, and venture capitalist Raymond Lane have joined HP after Hurd's departure.
The investigation will also observe the circumstances that led to the departure of Mark Hurd and the board's decision to approve the separation agreement between HP and Hurd.
The latest development comes as the United States Securities and Exchange Commission is already probing whether Hurd passed information about HP's $13.9 billion takeover of Electronic Data Systems Corp. to a former HP event hostess in 2008, before the announcement of the deal, the Wall Street Journal reported last month citing people familiar with the matter.
Palo Alto-based HP confirmed the investigation by saying HP is co-operating fully with the SEC on its investigation. However, the technology giant declined to disclose what matters the SEC is investigating.
Meanwhile, the Journal said the agency is also looking at Hurd's use of corporate expenses in his dealings with the HP contractor, Jodie Fisher, whose accusation of sexual harassment led to Hurd's ouster as HP's CEO in August.
HP is already facing plethora of shareholder lawsuits over the millions in exit package given by the company to Hurd. The exit package, however, was reduced after Hurd joined Oracle whose CEO Larry Ellison had openly criticized HP's board for sacking Hurd. Hurd joined Oracle as its co-president in September.
Hurd, who took the helm at HP in 2005, more than tripled HP's profit by adopting cost cutting measures and strengthening the company's core business of PCs and printers. During his tenure, HP shelled more than $20 billion in acquisitions, allowing it to diversify in to other areas like services, networking equipment and smartphones.
Following departure from HP, Hurd subsequently joined as co-president of Oracle, which competes with HP in software and systems markets. Meanwhile, Leo Apotheker, who was the former CEO of German business software maker SAP AG, replaced Hurd in November.
Shares of HP were down 27 cents at $46.05 in Thursday morning trade on the NYSE.