Hewlett-Packard has made public an internal email from the former chief financial officer of Autonomy to its founder Mike Lynch warning of revenues falling away that had been “covered up”, and of sales staff chasing “imaginary deals”.
HP claims the disclosure supports its allegations of fraud against Dr Lynch, who was then chief executive of Autonomy.
It has today accused him in a Californian court of lying “to an extraordinary extent” about the performance of his company during the due diligence process that led to its $11.7bn (£7.1bn) acquisition.
The email was among documents filed today in support of a proposed settlement with HP shareholders over the disastrous takeover claim that accounting improprieties meant its non-hardware revenues were 26.4pc lower than reported in the six-month period before the deal.
HP said in the court filings: “HP did not miss the fraud at Autonomy because it wasn’t diligent enough. The problem was Autonomy executives had lied. Repeatedly.”
The company is applying to the court to allow it settle damages claims from shareholders over alleged breach of fiduciary duty by its directors, including chief executive Meg Whitman.
The Autonomy acquisition, which led to an $8.8bn write-down little over a year later.HP wants to settle the damages claims and pursue its own cases against the British software company’s former management and its auditor, Deloitte, which signed off years of accounts that HP contends were “riddled with misrepresentations and outright falsehoods”.
The proposed settlement is opposed by Sushovan Hussain, Autonomy’s former chief financial officer, who HP also accuses of fraud and who, in turn, claims the Silicon Valley giant is attempting to cover up its own mishandling of the acquisition.
In its latest filings HP has included an email sent by Mr Hussain to Dr Lynch in December 2010 that it claims show the chief financial officer “in panic” over American sales of IDOL, a high-margin software product.
Mr Hussain wrote: “Really don’t know what to do Mike. As I guessed revenue completely fell away… We have covered up with Bank of America... There are swathes of reps with nothing to do maybe chase imaginary deals.
“So radical action is required, really radical, we can’t wait any more. Everywhere I look at US IDOL it’s bad.”
HP claims that the radical action taken by Dr Lynch was to offload the company in the biggest ever sale of a British technology company.
telegraph.co.uk
HP claims the disclosure supports its allegations of fraud against Dr Lynch, who was then chief executive of Autonomy.
It has today accused him in a Californian court of lying “to an extraordinary extent” about the performance of his company during the due diligence process that led to its $11.7bn (£7.1bn) acquisition.
The email was among documents filed today in support of a proposed settlement with HP shareholders over the disastrous takeover claim that accounting improprieties meant its non-hardware revenues were 26.4pc lower than reported in the six-month period before the deal.
HP said in the court filings: “HP did not miss the fraud at Autonomy because it wasn’t diligent enough. The problem was Autonomy executives had lied. Repeatedly.”
The company is applying to the court to allow it settle damages claims from shareholders over alleged breach of fiduciary duty by its directors, including chief executive Meg Whitman.
The Autonomy acquisition, which led to an $8.8bn write-down little over a year later.HP wants to settle the damages claims and pursue its own cases against the British software company’s former management and its auditor, Deloitte, which signed off years of accounts that HP contends were “riddled with misrepresentations and outright falsehoods”.
The proposed settlement is opposed by Sushovan Hussain, Autonomy’s former chief financial officer, who HP also accuses of fraud and who, in turn, claims the Silicon Valley giant is attempting to cover up its own mishandling of the acquisition.
In its latest filings HP has included an email sent by Mr Hussain to Dr Lynch in December 2010 that it claims show the chief financial officer “in panic” over American sales of IDOL, a high-margin software product.
Mr Hussain wrote: “Really don’t know what to do Mike. As I guessed revenue completely fell away… We have covered up with Bank of America... There are swathes of reps with nothing to do maybe chase imaginary deals.
“So radical action is required, really radical, we can’t wait any more. Everywhere I look at US IDOL it’s bad.”
HP claims that the radical action taken by Dr Lynch was to offload the company in the biggest ever sale of a British technology company.
telegraph.co.uk
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