THE long-running battle between Hewlett-Packard and Autonomy, the UK software company it bought for $11.1bn (£6.7bn), descended into a bitter war of words on Tuesday as Autonomy’s former finance director hit back against HP’s claims he is a “fraudster”.
In a court filing, former Autonomy FD Sushovan Hussain, who HP had described as “one of the chief architects of the massive fraud” it claims to have suffered at the hands of Autonomy, accused the Silicon Valley firm of a “corrupt” cover up of its own mismanagement, the Telegraph reported.
The claims are the latest volley in an increasingly scathing series of insults between the technology giant and the former management team of Autonomy following HP’s botched 2011 acquisition of Autonomy. A year after the deal was signed, HP wrote down the value of its purchase by $8.8bn, of which $5bn was attributed to accounting misstatements.
“HP’s opposition swells with bile, but its sound and fury signify nothing,” lawyers for Hussain said in court filing in California. The document also alleges that a proposed settlement between HP and its shareholders over the disastrous acquisition “is part of a larger effort by HP to cover up both its mismanagement of the Autonomy integration and its ploy to falsely accuse others”.
In its own filing, made last week, HP revealed plans to sue Hussain and Autonomy’s founder Mike Lynch.
HP has claimed that accounting misstatements at Autonomy were the reason for $5bn of the $8.8bn writedown it was forced to make a year after the acquisition and alleged that its management fraudulently boosted its revenues prior to the deal being signed.
In restated accounts published on Companies House earlier this year, HP drastically revised Autonomy’s previously published profit and revenue figures and claimed to have uncovered “extensive errors (including misstatements)”.
Autonomy’s former managers vigorously deny any impropriety and have argued that their policies were consistent with international reporting rules.
In his filing, Hussain claimed HP knew about accounting issues “raised for years” by analysts, and knew that “the integration of the companies would present accounting challenges, including moving from European IFRS standards to GAAP”.
An HP spokesperson dismissed Hussain’s filing in an emailed statement: “It’s preposterous for him to complain about HP and our shareholders joining forces and holding him accountable for the massive fraud that both believe he perpetrated upon the company.”
In a statement an HP spokesperson said Hussain’s interests and those of HP and its shareholders are “diametrically opposed”.
“It’s preposterous for him to complain about HP and our shareholders joining forces and holding him accountable for the massive fraud that both believe he perpetrated upon the company. If Hussain is truly interested in clearing his name, he should welcome the coming suit,” the spokesperson said.
According to Robert Half’s annual FTSE 100 CEO Tracker, 55% of chief executives come from a finance background
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