UK regulator probes accounts of HP-owned software firm Autonomy
12 Feb 2013
The UK accounting regulator yesterday said that it would launch a probe into the past financial reports of software maker Autonomy prior to its $11-billion acquisition by Hewlett-Packard (HP) in 2011.
The move comes two months after the US justice department opened a similar investigation relating to Autonomy Corp after HP accused the British software company on serious accounting improprieties, misrepresentation and disclosure failures prior to its acquisition.
The Financial Reporting Council (FRC) said in a brief statement that it had begun looking into accounts reported between 1 January 2009 and 30 June 2011.
The FRC, an independent and investigative body for accountants, has the power to impose unlimited fines and other sanctions.
HP acquired Autonomy in 2011 after conducting due diligence, but a year later took an $8.8-billion writedown alleging that it had been misled and paid 64 per cent above Autonomy's market value.
HP 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.''
