HP Takes $5B Charge, Attributed to Financial Malfeasance at Subsidiary Autonomy

By

What happens when you acquire a company and then find later that its books have been a bit cooked?

Tech giant HP is finding out this week. Today, the company announced that it will be incurring a massive $5-billion charge and blaming it on a raft of improprieties, misrepresentation and disclosure failures at software firm Autonomy, which it acquired last October for $11.1 billion.

It took a whistleblower to come forward to expose what HP is calling "serious accounting improprieties" and "a willful effort by Autonomy to mislead shareholders,” Reuters is reporting today.

This is one more very unneeded blow to HP, which has seen more than its share of problems as of late, including a virtual revolving door of CEOs, overall management turnover and challenges in its core personal computer and printer businesses.

For its part, Autonomy management is denying the allegations.

“The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false," a spokesperson for former Autonomy chief executive Mike Lynch said in a brief statement to Reuters.

Lynch left HP this past May, and it was reported at the time that he was “pushed” by HP management.

Autonomy, founded in Cambridge, England, offers a variety of enterprise search and knowledge management applications using adaptive pattern recognition techniques based on something called “Bayesian inference,” together with traditional methods. Its platform attempts to make sense out of any form of unstructured information, including text, voice and video, and based on that understanding perform automatic operations.

Today, as a subsidiary of HP, Autonomy has joint headquarters in both Cambridge and San Francisco.

HP said it has referred the matter to the U.S. Securities and Exchange Commission's enforcement division and the U.K.'s Serious Fraud Office for civil and criminal investigation. It said it will take legal action to recoup “what we can for our shareholders,” reported Reuters.




Edited by Braden Becker

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Pushing IoT Analytics to the Edge

By: Special Guest    11/29/2018

The IoT is generating enormous streams of real-time data that needs to be efficiently collected, processed, and analyzed. But data transport costs - a…

Read More

From Binge Watching to Bad Actors: Are Smart TVs The Next Attack Vector Into Consumer's Homes?

By: Arti Loftus    11/28/2018

Whether you're binge watching, shopping, co-browsing, or doing a google search on your Smart TV, bear in mind you're interacting with another computer…

Read More

A Comprehensive History of Reducing Automotive Emissions

By: Special Guest    11/26/2018

The history of government actions taken to reduce the emissions of automobiles and all combustion engines is an exhaustive list going back over half a…

Read More

Cybercriminals Love Cyber Monday Too: What to Look Out For

By: Cynthia S. Artin    11/26/2018

It's Cyber Monday again, and while e-commerce companies are preparing for an onslaught of shoppers, they are also heightening their awareness and prep…

Read More

The Importance of High-Quality Modern Technology for Your Home

By: Special Guest    11/23/2018

The pace of life is getting more and more hectic, and this sense of stress and being pressed for time often extends into the time we spend in our own …

Read More