HP BOARD MEMBERS are facing a lawsuit after shareholders filed a claim against them this week.
The shareholders are angry at the “waste of billions of dollars of HP assets” from the botched acquisition of British company Autonomy which has transpired to be worth just a fraction of the $11bn (£7.2bn) paid.
The recent lawsuit claims that board members were aware of the issues at Autonomy prior to the acquisition. The lawsuit filed claims, current chief executive Meg Whitman (pictured) “knew or disregarded… many red flags about Autonomy,” The Guardian reports.
It is also reported that Whitman knew or disregarded warnings from HP chief financial officer Catherine Lesjak.
Court papers claim that board members “knew non-public inside information concerning accounting improprieties relating to HP’s acquisition of Autonomy” before the deal was made.
HP acquired Autonomy in August 2011 for $11bn, but was forced to write down about $8.8bn in impairment costs 15 months later, which HP claims were the result of accounting misrepresentations discovered by PwC during a forensic review of Autonomy’s accounting practices.
Meg Whitman, HP chief executive, told analysts on the day of the write-down announcement that HP had relied heavily on the financial data audited by Deloitte, and brought in KPMG to essentially audit Deloitte’s work in a due diligence exercise.
Deloitte categorically denies that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy’s financial statements.
In November last year investors filed a lawsuit against HP and in March this year the Serious Fraud Office announced it had launched an investigation.
Last year on discovering the under-valuation HP referred the matter to the US Securities and Exchange Commission and the UK’s Serious Fraud Office.
A spokesman for HP told Accountancy Age: “As we have continually said, HP relied on the audited financial statements and the representations of Autonomy’s management and its auditors regarding Autonomy’s business and revenue.
“Those facts and figures appear to have been willfully manipulated by certain Autonomy employees prior to the company’s acquisition, to mislead investors and potential buyers.”
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