Another twist in HP's Autonomy dispute

Hewlett Packard (HP) has revealed its intention to sue the UK arm of accountancy firm Deloitte over its role in HP’s acquisition of British software company Autonomy Plc nearly three years ago.

HP made the announcement during the latest hearing in its protracted and bitter legal dispute with Autonomy’s former executives. The firm’s decision to pursue a case against Deloitte emerged as US Judge Charles Breyer refused to approve part of a settlement reached between HP and the shareholder group which is suing it over the Autonomy acquisition. According to Judge Breyer, HP’s attempt to pay the investors’ lawyers was a "potentially fatal" clause which meant he was not able to agree to the settlement.

A spokesman for HP noted that the company “will continue to work to hold the former executives of Autonomy as well as Autonomy’s auditor, Deloitte UK, responsible for the wrongdoing that occurred.”

Computing giant HP acquired Autonomy in an $11bn deal in 2011, but less than one year later was forced to make an $8.8bn write down on the transaction. HP alleges that the November 2012 write down came as a direct result of a number of accounting improprieties, misrepresentations and disclosure failures carried out by Autonomy and its executives during the acquisition process.

Following an extensive internal audit, HP dramatically revised Autonomy’s 2010 performance and noted that it had discovered “extensive errors – including misstatements” in Autonomy’s accounts, which were audited by Deloitte.

Deloitte has refuted HP’s claims, saying that any case brought against the firm would be “utterly without merit”. Deloitte has noted that neither HP nor Autonomy enlisted its services to carry out due diligence during the sale of Autonomy and that the firm merely served as an auditor to Autonomy at the time of the transaction.

Former Autonomy executives have claimed that the dramatic decline in the unit’s value was a result of poor integration planning on HP’s part, as well as in-fighting within the company’s wider organisation. Autonomy’s founder, Dr Mike Lynch, has also denied any wrongdoing, claiming that the company’s accounts were legitimate as they had been signed off by Deloitte.

News: http://www.cbronline.com/news/hp-to-sue-deloitte-uk-over-autonomy-deal-4354838

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