Hewlett Packard has blamed a $6.85bn loss on alleged accountancy fraud at Autonomy, the software firm it bought last year. The computer maker has asked US and UK authorities to investigate alleged misrepresentations of Autonomy's finances before HP took over the UK software group last year. HP claimed Tuesday that there were substantial instances of [...]

Hewlett Packard has blamed a $6.85bn loss on alleged accountancy fraud at Autonomy, the software firm it bought last year. The computer maker has asked US and UK authorities to investigate alleged misrepresentations of Autonomy's finances before HP took over the UK software group last year.


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HP claimed Tuesday that there were substantial instances of financial fraud in connection with its acquisition of the software company Autonomy in 2011, and took a one-time $8.8 billion accounting charge.
In its routine quarterly report, the Silicon Valley tech giant based in Palo Alto alleged that there was serious fraud and misrepresentation on the part of Autonomy, a British company.
"HP is extremely disappointed to find that some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy's acquisition by HP," the company said in a statement.
This "severely impacted" its ability to value the company accurately, it added.
Specifically, HP today disclosed $8.8 billion in non-cash charges “linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy … that occurred prior to HP’s acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term.”
In effect, the company is writing down close to 90 percent of the value of the transaction.
The deal was originally reached under Apotheker, and closed under current CEO Meg Whitman.
HP said it had launched an internal investigation after a "senior member [of Autonomy's management] alleged there had been a series of questionable accounting and business practices" at the group.
The company said as well as referring the matter to the regulatory authorities, it would be taking civil court action against "various parties" to recoup money for its shareholders.
HP shares fell 11% in pre-market trading in New York following the announcement.
HP completed the takeover of Autonomy for $12bn in October last year.

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