Former exec says HP 'bungled' the Autonomy acquisition, alleges cover-up

An HP spokesperson calls ex-Autonomy CFO Sushovan Hussain's statements 'preposterous'

Autonomy's former chief financial officer has claimed that Hewlett-Packard is accusing him and other ex-employees of fraud in order to cover up its own failings in the disastrous 2011 acquisition.

After buying Autonomy, HP took a $US8.8 billion writedown on the $US11.1 billion deal, citing widespread accounting improprieties at the company before the sale.

It parted ways with Autonomy founder Mike Lynch as well as ex-CFO Sushovan Hussain. The latter filed a motion in June opposing a settlement HP reached with shareholders over the matter, arguing that if it isn't stopped, the truth about what happened with Autonomy will be lost.

In a court filing last week, HP called Hussain's motion "ludicrous," calling him "one of the chief architects of the massive fraud on HP that precipitated this litigation." HP also revealed that it plans to sue Hussain in the U.K., where Autonomy is based.

"HP's opposition swells with bile, but its sound and fury signify nothing," Hussain said in a new response to HP filed on Tuesday. If upheld, the shareholder settlement would conceal the truth, namely that "HP's bungled integration diminished Autonomy's value," it adds.

HP bought Autonomy "knowing it was paying a premium, and knowing that its CFO objected that the price was too high," the filing states. "HP also knew about accounting issues raised for years by analysts, and it knew that the integration of the companies would present accounting challenges, including moving from European IFRS standards to GAAP."

But HP, then led by CEO Leo Apotheker, decided to complete the deal because it wanted to "take HP in a completely new direction," according to Hussain. After Apotheker was forced out as CEO and replaced with Meg Whitman, the integration of Autonomy "failed miserably" as the new guard lacked enthusiasm and vision, the filing adds.

"Hoped-for synergies turned into conflicts and redundancies," it states. "Sales incentives were mismatched and unproductive. Unhappy employees fled. Apotheker's vision for the acquisition went from dream to disaster."

HP ultimately took the writedown, "characterizing accounting disputes as 'fraud,'" the filing adds.

Since then, HP has "engaged in a vigorous game of Whack-A-Mole, batting at various investor lawsuits that pose the threat of discovery and disclosure of HP's own mismanagement," the filing states, in reference to the carnival game where a player strikes mole dolls with a club as they pop up at random in holes.

An HP spokesperson dismissed Hussain's filing in an emailed statement: "It's preposterous for him to complain about HP and our shareholders joining forces and holding him accountable for the massive fraud that both believe he perpetrated upon the company."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesapplicationsAutonomylegalCivil lawsuitssoftwareHewlett-Packard

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?