UK Serious Fraud Office probing Autonomy’s accounts: HP

The UK Serious Fraud Office (SFO) has opened an investigation into allegations by Hewlett-Packard Co (HP) that British software firm Autonomy Corp had indulged in serious accounting improprieties prior to its acquisition in 2011.

California-based HP said in a filing yesterday with the US Securities and Exchange Commission that the SFO informed it on 6 February that it has launched an investigation into Autonomy's accounts, which follows a similar probe started three months back by the US Justice Department.

Last month, The UK accounting regulator, The Financial Reporting Council (FRC) said in a brief statement that it had begun looking into accounts reported by Autonomy between 1 January 2009 and 30 June 2011.

HP had acquired Autonomy in 2011 for $11.4 billion after conducting due diligence, but a year later took an $8.8-billion writedown alleging that it had been deliberately misled and paid 64 per cent above Autonomy's market value.

HP had then said that it discovered ''a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers and severely impacted HP management's ability to fairly value Autonomy at the time of the deal.''

HP launched its internal investigation after a senior member of Autonomy's leadership team made the disclosure, following the departure of Autonomy founder Mike Lynch. The whistleblower provided details of a series of questionable accounting and business practices at Autonomy prior to the acquisition.