MphasiS tanks 6% on NSE as HP takes $8.8 billion hit
Mumbai: Shares of MphasiS on Wednesday tanked more than six percent in early trade on bourses after its parent company HP took a USD 8.8 billion write-down linked to Autonomy Corp. Business, saying there were "accounting improprieties" before its 2011 acquisition of the company.
HP yesterday said that it has taken a USD 8.8 billion 'charge' on British software firm Autonomy as some former executives of the acquired company had "willfully misrepresented" accounts.
Reacting to the news which came after Indian markets had closed, the shares of IT services firm Mphasis opened on a weak note and then fell 4.23 per cent to an early low of Rs 382 on the BSE.
A similar trend was seen on the National Stock Exchange as well, where the stock after opening at Rs 395, fell 6.52 percent to an early low of Rs 373.90.
Market experts attributed the fall in the counter as a knee jerk reaction to the development last night.
"HP is extremely disappointed to find that some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy's acquisition by HP," HP said in a statement yesterday.
These efforts appear to have been a "willful effort" to mislead investors and potential buyers, and severely impacted HP management's ability to "fairly value" Autonomy at the time of the deal, it added.