Business

Former Autonomy CEO tells HP to put up or shut up

The bitter tech tussle between Hewlett-Packard and the former head of a UK software firm it recently acquired was ratcheted up yesterday.

Mike Lynch, the former CEO of Autonomy, blasted HP in an open letter and demanded evidence from the company after it accused him of cooking his software company’s books to raise the sales price.

HP had accused Lynch of just that — saying last week it was forced to take an $8.8 billion write-down on the $11 billion deal because it found — post closing — irregularities with Autonomy’s books.

“It was shocking that HP put non-specific but highly damaging allegations into the public domain without prior notification or contact with me, as former CEO of Autonomy,” Lynch said.

“I utterly reject all allegations of impropriety,” he added.

Lynch questioned how HP could allege such massive manipulation but not have noticed it before buying his company.

“Please explain how such issues could possibly have gone undetected during the extensive acquisition due diligence process and HP’s financial oversight of Autonomy for a year from acquisition until October 2012,” he said.

Despite the vitriol, HP refused to get drawn any further into the raging verbal war. HP said it had evidence that Autonomy willfully misled HP with its accounting but would let regulators here and in the UK — where Autonomy was based — figure it out.

“While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders,” HP said in a statement.

“In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury,” the statement said.

A number of firms, including Deloitte and KPMG, looked at Autonomy’s books without raising red flags before the acquisition.

Some of the potential discrepancies have been chalked up to Autonomy being a British company and adhering to slightly different accounting standards.

HP said last week that it uncovered the issues after a former Autonomy employee blew the whistle six months ago.

Some have suggested that HP willfully ignored clear signs about the company and blindly overpaid.