HP to take $8.8 billion charge on Autonomy purchase

HP wasn't exactly doing well before, but the PC maker is definitely in financial deep water today, and the company is putting the finger on the people in charge of a company HP acquired in 2011.

Today, HP announced it will take a massive one time charge of $8.8 billion, related to its purchase of the UK-based Autonomy, which it completed last year for $10.3 billion. In its statement, HP doesn't mince any words:

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. These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal.

The company added that it will take the results of its investigation to the US Securities and Exchange Commission’s Enforcement Division and the UK’s Serious Fraud Office. It also plans to take certain parties to civil court.

Even though HP feels it was scammed by the owners of Autonomy, it claims it is sticking with its purchase, saying, "We remain 100 percent committed to Autonomy and its industry-leading technology.” In September, it was announced that Microsoft’s president of North America, Robert Youngjohns, was going to move to HP to take over the Autonomy division.

Source: HP press release | Image via HP

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8 Comments

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Isn't it HPs job to do all those accounting auditing before making the descision to buy them out? In my view, HP failed to do that and now blaming it to cooking books (which it very well might be but they should have checked it before hands).

2c.

wrack said,
Isn't it HPs job to do all those accounting auditing before making the descision to buy them out? In my view, HP failed to do that and now blaming it to cooking books (which it very well might be but they should have checked it before hands).

2c.


Absolutely. They should have done their due diligence.

And, though they were allegedly warned that this might be occurring, they went through with it anyway.

They did hire two firms to due this all for them, and they both gave Autonomy a stamp of approval, so I do wonder if they would be culpable in any way. I would assume so.

This I did mention in the forum post that I made (though uncredited), bringing this story to Neowin's attention...

http://www.neowin.net/forum/to...aud-in-autonomy-write-down/

Just bought a TV and I didn't look on the box properly, doesn't do half of what I thought, will ask to pay half price ...

john.smith_2084 said,
It looks like their entire website is one big propaganda of nothing http://www.autonomy.com/
I am not even sure if there is a real product behind it

Unfortunately I can say yes there is a real product behind that company, and it's (unfortunately) used by the large majority of national and international lawfirms in North America for document management, although trust me, as someone who actually works with their products, not the highest quality code I've ever seen

HP don't seem to be able to get anything right these days. If they are going to sue anyone it should be the accounting firms who did the "due diligence" for them. Obviously they failed at the simple task they were paid to do.

Knowing the "Big 4" they probably put their most junior graduates onto the task, and charged as if their most senior partners were performing the work.