Autonomy’s Lynch Says HP Misleads Shareholders on Deal

Autonomy Corp. founder Mike Lynch, accused after his company’s acquisition by Hewlett-Packard Co. (HPQ) of mis-categorizing revenue, said the U.S. computer maker is misleading shareholders and smearing management of the U.K. software firm.

Lynch made the comments in an open letter, released today by his public relations company to Hewlett-Packard shareholders before their annual meeting, saying he had “serious concerns about the way HP has conducted this affair.”

“HP has not provided information or evidence to the Autonomy team to substantiate any allegation,” Lynch said.

HP Chief Executive Officer Meg Whitman “has made incendiary and defamatory accusations on behalf of her company,” Lynch said in the letter. “She should now present the detailed evidence that justifies those allegations.”

HP responded to the letter by issuing a statement through its public relations company saying it had “uncovered numerous accounting irregularities at Autonomy prior to its acquisition by HP.” HP reported the matter to civil and criminal regulators in the U.S. and U.K. and continues to work with them, it said.

Hewlett-Packard took an $8.8 billion writedown in 2012 on the deal, citing activities such as booking hardware sales as software among instances of “serious accounting improprieties, disclosure failures and outright misrepresentations.”

Lynch has denied accusations of malpractice and said Autonomy struggled because Hewlett-Packard stymied the Cambridge, England-based software company’s sales.

The Autonomy deal was negotiated by Whitman’s predecessor, Leo Apotheker, and Whitman took her post less than two weeks before the sale closed. Shareholders have sued Hewlett-Packard over the writedown, alleging its board and Whitman ignored warnings of accounting irregularities.

The HP shareholder meeting is being held today at 2 p.m. local time, said the Palo Alto, California-based company.

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Mark Beech

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.