7th APRIL 2015 - Vol.XXXVIII No.018
Business News

HP urges British firm probe

SAN FRANCISCO: Hewlett-Packard yesterday called for a probe into "willful" financial misstatements by Autonomy, a British software firm it bought for over $10 billion, which HP now says was overvalued.

The California-based computer giant said accounting problems at Autonomy forced it to take a massive writedown, and that both US and British authorities should investigate the irregularities.

"HP has referred this matter to the US Securities and Exchange Commission's Enforcement Division and the UK's Serious Fraud Office for civil and criminal investigation," HP said in a statement as it announced a big hit to earnings.

"In addition, HP is preparing to seek redress against various parties in the appropriate civil courts to recoup what it can for its shareholders. The company intends to aggressively pursue this matter in the months to come."

HP announced the news as it reported a $6.9 billion quarterly loss. The company was pushed into the red by the $8.8bn writedown, mostly due to the newly-uncovered valuation issues at the British firm.

Under accounting rules, firms must take a charge against earnings when they revalue business units, even if their cash position is unchanged.

"HP is extremely disappointed to find that some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy's acquisition by HP," said the US company.

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