In an interview with the LA Times, HP chief tells all about Autonomy and PSG.
HP chief Meg Whitman claims the firm had no choice but to go public with its misgivings about the financial goings on at Autonomy.
The hardware giant has been embroiled in a war of words with Autonomy’s former management team since making allegations about “serious accounting improprieties” at the firm.
These alleged financial irregularities have been cited by HP as the reason why it was forced to swallow a $5 billion write-down during its final quarter of last year.
I’m not sure we would have figured out the accounting improprieties had we not had a guide on that journey.
In a recent interview with the LA Times, Whitman shed some light on the events leading up to HP going public with its allegations.
Since the claims first came to light, former Autonomy chief Mike Lynch, who left the firm in May 2012, has repeatedly hit out at the company for speaking openly about its misgivings.
“When Mike left, it was three or four weeks [later], and a senior executive from his team came forward and said, ‘Listen, I need to tell you what has been going on at Autonomy for the three years prior to when you bought it,’” said Whitman.
“I’m not sure we would have been able to figure out the accounting improprieties had we not had a guide on that journey...because it was pretty sophisticated.”
In the interview she said the size of the write-down meant HP had no choice but to talk about what was going on.
“The magnitude of the write-down we took, the seriousness around the accounting improprieties [and] disclosure failures were significant enough that there was nothing else to do except to say, ‘Hey, here’s what we know,'” explained Whitman.
The reason why Lynch decided to up sticks and leave the firm before all this was known was because of its financial performance, she suggested.
“I think their Q1 results weren’t great, but they were okay. And, of course, the Q2 results were not up to expectations or up to their plan. And that was really the catalyst for Mike leaving the company,” she said.
During the interview she also talked about how the company eventually decided to keep hold of its personal computer arm, PSG, after it emerged in the summer of 2011 that HP was considering selling it.
“I assembled a team of about 100 individuals, and I split the team into two. And I said there’s a team that’s going to argue the case to keep the business, and there will be a team that will argue to not keep the business.
“[Later on] there was a presentation by both sides...I actually had people who might have had a self interest in one outcome [and] made them work on the other side.
“And then at the end of that day where we pulled all of the analysis together, it was obvious to me that the right thing to do was to keep PSG," Whitman added.