US DOJ to probe fraud at Autonomy
Computing giant, Hewlett-Packard has said in a report that the US Department of Justice has officially launched an investigation into the alleged wrongdoings in accounting at British software maker, Autonomy, which was acquired by HP in the previous year.
HP had accused Autonomy of indulging in misleading accounting practices during the merger negotiations between the two companies in 2011. Autonomy, which was established in 1996, grew from its origins to become one of Europe's largest and fastest-growing software companies. It was acquired by HP in October 2011 for more than $11 billion following negotiations between the two companies.
HP's Chief Executive Officer Meg Whitman had said that former Autonomy used misleading accounting and also kept key information secret during its negotiations with HP about the merger in 2011. HP and former Autonomy executives have exchanged in a serious and heated exchange of comments.
The company has announced a non-cash impairment charge of $8.8 billion in the fourth quarter relating to the Autonomy acquisition. It said that about $5 billion of that is linked to accounting improprieties, misrepresentation and disclosure failures by Autonomy.
Mike Lynch, the British software company's former chief executive, had responded sharply to the allegations. Mr. Lynch wrote an angry letter to HP asking the company to explain its highly damaging allegations.