US DOJ launches probe of potential fraud in $11B HP-Autonomy deal
Troubled PC maker Hewlett-Packard is now assisting a U.S. Department of Justice investigation into potential fraud conducted by Autonomy, a company that HP purchased more than $11 billion.
HP announced in its annual 10-K regulatory filing this week that the Justice Department is looking into claims that Autonomy Corporation misrepresented its financial performance before the acquisition was finalized, Bloomberg noted on Friday.
The DOJ investigation comes a month after HP was forced to write down an additional $8.8 billion related to its purchase of Autonomy. In its earnings statement, HP alleged that Autonomy participated in "serious accounting improprieties, disclosure failures, and outright misrepresentations."
The initial $10.3 billion purchase of Autonomy was announced last year as HP attempted a radical shakeup under then-CEO Leo Apotheker. Autonomy is an enterprise software business similar to SAP, the company Apotheker was CEO of before joining HP in 2010. The final closing price eventually reached $11.1 billion in October 2011 when currency fluctuations and other factors were taken into consideration.
Apotheker was quickly fired from HP after less than 11 months on the job, a decision made only months after the company announced it would kill the WebOS platform it had acquired from Palm. The company also announced plans to spin off its consumer PC business ??a decision that was reversed last October under the company's new president and chief executive, Meg Whitman.
The newly announced Justice Department investigation is just the latest twist in what has been a tumultuous two years for HP, which is the largest seller of Windows PCs in the U.S. and a chief competitor of Apple's Mac lineup. In addition to the DOJ, HP is also providing information to the U.S. Securities and Exchange Commission, as well as the U.K. Serious Fraud Office.
HP's claims of accounting errors are responsible for $5 billion of the company's $8.8 billion writedown related to Autonomy. Mike Lynch, the former CEO of Autonomy, has refuted HP's allegations.
"It is extremely disappointing that HP has again failed to provide a detailed calculation of its $5 billion writedown of Autonomy, or publish any explanation of the serious allegations it has made against the former management team, in its annual report filing," Lynch said. He added that he will cooperate with any investigations.
HP announced in its annual 10-K regulatory filing this week that the Justice Department is looking into claims that Autonomy Corporation misrepresented its financial performance before the acquisition was finalized, Bloomberg noted on Friday.
The DOJ investigation comes a month after HP was forced to write down an additional $8.8 billion related to its purchase of Autonomy. In its earnings statement, HP alleged that Autonomy participated in "serious accounting improprieties, disclosure failures, and outright misrepresentations."
The initial $10.3 billion purchase of Autonomy was announced last year as HP attempted a radical shakeup under then-CEO Leo Apotheker. Autonomy is an enterprise software business similar to SAP, the company Apotheker was CEO of before joining HP in 2010. The final closing price eventually reached $11.1 billion in October 2011 when currency fluctuations and other factors were taken into consideration.
Apotheker was quickly fired from HP after less than 11 months on the job, a decision made only months after the company announced it would kill the WebOS platform it had acquired from Palm. The company also announced plans to spin off its consumer PC business ??a decision that was reversed last October under the company's new president and chief executive, Meg Whitman.
The newly announced Justice Department investigation is just the latest twist in what has been a tumultuous two years for HP, which is the largest seller of Windows PCs in the U.S. and a chief competitor of Apple's Mac lineup. In addition to the DOJ, HP is also providing information to the U.S. Securities and Exchange Commission, as well as the U.K. Serious Fraud Office.
HP's claims of accounting errors are responsible for $5 billion of the company's $8.8 billion writedown related to Autonomy. Mike Lynch, the former CEO of Autonomy, has refuted HP's allegations.
"It is extremely disappointing that HP has again failed to provide a detailed calculation of its $5 billion writedown of Autonomy, or publish any explanation of the serious allegations it has made against the former management team, in its annual report filing," Lynch said. He added that he will cooperate with any investigations.
Comments
Quote:
Originally Posted by ScartArt
must have typed in the wrong url, I appear to be on HPinsider.com
You know you could have just chosen not to click the article if you weren't interested in HP at all.
Some of us, OTOH, who are interested in Apple, think that news about the industry it operates in, and its biggest competitors is also important.
Meg Whitman has no idea how to turn around HP. The fact that HP does not expect to enter the smartphone market before 2014, despite owning Palm, and having at least some of its engineers as employees, seems to indicate she is hardly interested in returning HP to a pioneering engineering company, but rather, wants to financial engineer her way to big bonuses.
Hence she is trying to use her political pull to make money which she doesn't know how to in the market.
And it's gone.
Seriously, 10B is a lot - I do remember the purchase, just not it being that much. The PC landscape is changing, and with news like this [I]things ain't cooking in HP's kitchen[/I].
Quote:
Originally Posted by addicted44
Meg Whitman has no idea how to turn around HP. The fact that HP does not expect to enter the smartphone market before 2014, despite owning Palm, and having at least some of its engineers as employees, seems to indicate she is hardly interested in returning HP to a pioneering engineering company, but rather, wants to financial engineer her way to big bonuses.
Hence she is trying to use her political pull to make money which she doesn't know how to in the market.
PCs are low margins for HP. They are trying to be the next IBM. They did try to sell smart phones under WebOS but that went no where (no doubt because of the creepy commercials). Maybe they'll regroup and sell an innovative Android device or WP8 device.
Originally Posted by JeffDM
Businesses seem too kind to failure on the part of the people that run them.
It's endemic of the whole industry, it seems. Google and Motorola… Everything that any analyst has ever said… DigiTimes…
They WERE trying to be the new IBM. Which is why they hired Leo. However, when he started making the moves that IBM made (selling off the PC division) they promptly fired him, although the board was absolutely in favor of that decision. The market did not react as they expected and they pinned the blame on Leo (which was successful, because Leo was indeed incompetent. But let's not forget, it was the same board that hired Leo in the first place).
The reality is that HP has one of the most incompetent boards in the world (its the same company which has hired a CEO who got fired for spying on directors, hired a CEO who showed short term profits by killing all engineering expenses, but got himself fired by being ridiculously sloppy with whom he was sleeping, hired Leo, a guy who sucked at SAP, and hired Meg Whitman, who, as you note, had that Akype acquisition).
All they are doing at this point is financial jujitsu so they can maximize their bonuses while they bleed HP dry.
Quote:
Originally Posted by ScartArt
must have typed in the wrong url, I appear to be on HPinsider.com
You don't know your history do you?
http://davidfeldt.tumblr.com/post/2348871456/steve-jobs-recounting-his-summer-job-at-hp-at-12
Originally Posted by curveddesign.com
You don't know your history do you?
http://davidfeldt.tumblr.com/post/2348871456/steve-jobs-recounting-his-summer-job-at-hp-at-12
See, that HP involved Bill Hewlett and David Packard and didn't think it could buy a bankrupt company and "get into the cell phone game" seven years after Apple reinvented it.
Yeah, they tried to sell smart phones for a whole two months, that's not nearly long enough for them to be in the market. Their one release of smart phones wasn't even their own design, it was simply the product that was in the line at the time they bought Palm and when it wasn't an instant smash hit they quickly declared failure.
That idiot Leo just wanted to write it off and kill it like the PC business he wanted to sell.
Quote:
Originally Posted by ScartArt
must have typed in the wrong url, I appear to be on HPinsider.com
Quote:
Originally Posted by addicted44
You know you could have just chosen not to click the article if you weren't interested in HP at all.
Some of us, OTOH, who are interested in Apple, think that news about the industry it operates in, and its biggest competitors is also important.
Yeah, he could have ... but then he wouldn't have had an "opportunity" to complain, and as we all know, some people, like ScartArt, are like seagulls. The only time they're happy is when they are either shitting or squawking.
Quote:
Originally Posted by addicted44
You know you could have just chosen not to click the article if you weren't interested in HP at all.
Some of us, OTOH, who are interested in Apple, think that news about the industry it operates in, and its biggest competitors is also important.
I clicked on it because I thought it may have been written with some relevance to Apple, but sadly not just the same story that has been reported in the regular news channels.
So you are interested in the industry but you rely on Appleinsider to keep up to date? What biased and blinkered view you must have.
I did it. I took the money and left the country. Im living on a desert island with satellite internet and plenty of coconuts.
Mike Lynch has a different side of this story. Let's see...
Originally Posted by tylerk36
I did it. I took the money and left the country. Im living on a desert island with satellite internet and plenty of coconuts.
$11 billion and all you have are coconuts? That's the kind of mismanagement that got HP in this mess in the first place.
Quote:
Originally Posted by ScartArt
I clicked on it because I thought it may have been written with some relevance to Apple, but sadly not just the same story that has been reported in the regular news channels.
So you are interested in the industry but you rely on Appleinsider to keep up to date? What biased and blinkered view you must have.
What exactly was biased and blinkered in this article? Do you complain when the NY Times has an article about something happening in California, because it's called The New York Times?
Quote:
Originally Posted by anonymouse
What exactly was biased and blinkered in this article? Do you complain when the NY Times has an article about something happening in California, because it's called The New York Times?
nothing really because it is just a copy of a Bloomberg article. My point was a general one in that if you rely on Appleinsider for your tech news you would have a very biased and blinkered view on the industry.
If everybody is so interested in reading about HP on this site then why isn't the following story being covered which seems much more relevant to Apple given the continuous speculation that they will also be moving into the TV business:
Quote:
Intel Corporation is set to work with Hewlett-Packard Co, Quanta Computer, Lenovo, and Compal Electronics to introduce smart TVs in 2013, say component makers.
http://wallstcheatsheet.com/stocks/instagram-usage-drop-explained-intel-partners-with-hewlett-packard-tech-business-roundup.html/?ref=YF