HP's Autonomy Buy Gets FBI Scrutiny

 @DavidZie
on November 21 2012 10:18 AM
Hewlett-Packard
Hewlett-Packard's controversial acquisition of Autonomy PLC for $10 billion has triggered an inquiry by the FBI. Reuters

Hewlett-Packard's (NYSE: HPQ) controversial acquisition of Autonomy PLC of the UK for $10 billion has now triggered an inquiry by the FBI, various reports said.

The world's biggest computer company Tuesday disclosed an $8.8 billion write-off due to alleged accounting fraud in the deal, which CEO Margaret Whitman said was reported to the U.S. Securities and Exchange Commission and the UK Serious Fraud Office.

 

Now the FBI has opened a case as well because of the scale of the alleged fraud and its international nature. That would give the agency jurisdiction in the matter.

 

In an analyst call following the Palo Alto, Calif., company's publication of fourth-quarter results, HP General Counsel John Schultz said the company “will be very aggressive in recovering value for our shareholders” but didn't say the FBI was examining the case.

 

Subsequently, former Autonomy CEO Mike Lynch denied any wrongdoing. Whitman said the fraud came to light only after Lynch quit in May and subordinates reported the alleged fraud.

 

HP reported a record fourth-quarter loss of $6.85 billion, or $3.49 per share, compared with prior-year net income of $239 million, or 12 cents per share. Revenue fell 5 percent to $29.96 billion.

 

Shares of HP rose 23 cents to $11/94  in Wednesday trading, after setting a 10-year low of $11.35 on Tuesday. They've fallen 54 percent in 2012.

 

 

 

 

 

Share this article