Hewlett-Packard’s November 2012 decision to write off billions of dollars in connection with the acquisition of infrastructure software vendor Autonomy continues to dog the company as it prepares to face shareholders at an annual meeting Wednesday.
HP took a $8.8 billion write-down on Autonomy, attributing the bulk of it to alleged accounting improprieties at the company before the $11.1 billion acquisition in October 2011. It has since engaged in a public battle with Autonomy’s founder and former CEO, Mike Lynch, who has denied any wrongdoing.
Lynch, who left HP shortly after the deal closed, issued a public letter to HP shareholders on Wednesday, saying HP CEO Meg Whitman has made a series of “incendiary and defamatory accusations” while keeping investors in the dark regarding key details of HP’s allegations.
“The evidence shows that HP is not just smearing us, but also misleading you, its shareholders,” Lynch wrote. “I ask you to help put things right.”
Since the write-down, “HP has not provided information or evidence to the Autonomy team to substantiate any allegation,” Lynch added. “Instead, it has selectively leaked documents and information to the international media, frequently using material taken out of context to create false impressions and smear our reputations.”
Senior HP executives, “fully understood Autonomy’s accounting methods from when they took over the company in October 2011,” in contrast to HP’s claim that it didn’t gain such knowledge until a whistleblower stepped forward after the deal closed, Lynch said.
For example, “HP says it ‘eventually learned that a portion of Autonomy’s revenue were related to hardware sales,’” Lynch’s letter adds. “Yet documents show that HP knew about Autonomy’s hardware sales from October 2011. Does HP still maintain it knew nothing before June 2012?”
HP should release the full details supporting its allegations, Lynch said.
While a number of HP shareholders have sued the company in connection with the Autonomy controversy and write-down, HP has yet to file suit against Lynch.
Authorities in the U.S. and U.K. have launched probes into the matter.
In a statement Wednesday, HP spokesman Michael Thacker didn’t address Lynch’s letter directly.
“As HP has previously reported, it uncovered numerous accounting irregularities at Autonomy prior to its acquisition by HP,” he said. “HP reported those irregularities to appropriate civil and criminal regulators in the US and UK. HP continues to cooperate in ongoing investigations by those regulators.”