Former Autonomy CEO uses open letter to reject HP impropriety claims

Boxing gloves
5 Dec, 2012

Mike Lynch launches website to publicly reject HP's allegations.

Former Autonomy CEO Mike Lynch has set up a blog to publicly reject claims that financial improprieties took place at the firm before its acquisition by HP.

Last month, the hardware giant accused Autonomy’s former management team of “accounting improprieties” and “disclosure failures” in the run up to its acquisition of the firm in October 2011.

HP claim these alleged financial irregularities resulted in it having to stomach a $5 billion impairment charge.

Since HP went public with its accusations in November, Lynch has repeatedly denied that any financial mismanagement took place at Autonomy while he was in charge.

He has now taken these denials one step further by launching a website to provide him, and the other former members of the Autonomy management team, with a means of publicly rejecting the allegations.

The site has already been used to publish an open letter, dated 27 November but published on 3 December, from Lynch to the HP board of directors.

In it he firmly states that he “rejects all allegations of impropriety”, and expressed shock at HP’s decision to air its claims without notifying him.

He then goes on to pose a number of questions about the exact nature of the allegations HP has made against his former firm.

For instance, he calls on HP to publish a breakdown of how it calculated the impairment charge, as well as an explanation of how these alleged irregularities could have been missed during the due diligence stage of the acquisition.

“Can HP really state that no part of the $5 billion write down was, or should be, attributed to HP’s operational and financial mismanagement of Autonomy since the acquisition,” he queried.

“Why did HP senior management apparently wait six months to inform its shareholders of the possibility of a material event related to Autonomy,” he added.

He then concludes the missive by stating that he is publishing it online in the interests of “complete transparency” and that he hopes the situation will be resolved as soon as possible.

“Hewlett Packard is an iconic technology company, which was historically admired and respected...[Autonomy] joined forces with HP with real hopes for the future,” he added.

“I have been truly saddened by the events of the past months, and am shocked and appalled by the events of the past week.”