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Autonomy CEO: Hewlett-Packard Knew Autonomy Was An IFRS, Not U.S. GAAP Company Before It Bought The Business

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Hewlett-Packard Company (NYSE: HPQ) acquired Autonomy in October 2011, but even after three years the news surrounding the acquisition refuse to die down. In a new twist to the tale, Autonomy’s founder, Michael Lynch, is raising questions on ‘accounting misrepresentations’ in the $8.8 billion write-down by Hewlett-Packard on its acquisition of Autonomy.

Lynch was recently on CNBC to elaborate on his claim against Hewlett-Packard. 

"Let's remember, back in November 2012, we had this massive $5 billion write-down. For the last two years, lots of people have been sitting here asking how on earth could you get that number, what made up that, how did that come about and what we have today is finally the answer," Lynch said.

He continued, "We have a revelation document, which is called the re-basing exercise and Hewlett-Packard has referred to this document in many court filings as the basis of the write-down and this is an incredibly detailed document. It goes from individual deals, all the way out deal by deal and it shows the deals that have been taken out by Hewlett-Packard in order to produce the numbers and the write-down and those numbers all reconciled to the numbers they have been saying.

“But the really key thing about this document is that for each deal that has moved, it gives the reasons that its moved and the reasons these deals has moved are things like not compatible with U.S. GAAP. Now the important thing about that is Autonomy was never a U.S. GAAP company, it was an IFRS company, European accounting. Hewlett-Packard knew that perfectly well when it bought the business. Nowhere in this re-basing document does it talk about fraud. What it also shows is that there was no money missing.”

 

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