HP takes $8.8 bn hit, alleges accounting fraud in Autonomy
Quotes

HP takes $8.8 bn hit, alleges accounting fraud in Autonomy

Last Updated: Tuesday, November 20, 2012, 23:18
 
 Comment 0
 
HP takes $8.8 bn hit, alleges accounting fraud in Autonomy
New York: In what could be one of the biggest corporate frauds, HP today said it has taken a USD 8.8 billion 'charge' on Autonomy, the British software firm it had bought in 2011, as some former executives of the acquired company had willfully misrepresented accounts.

"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," the technology giant said in a statement.

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.

The company announced "a non-cash impairment charge of $8.8 billion related to Autonomy in the fourth quarter of its 2012 fiscal year."

"The majority of this impairment charge, more than USD 5 billion is linked to serious accounting improprieties, misrepresentation and disclosure failures discovered by an internal investigation by HP and forensic review into Autonomy's accounting practices prior to its acquisition," it added.

The balance of the impairment charge is linked to the recent trading value of HP stock and headwinds against anticipated synergies and marketplace performance.

Shares of HP crashed by nearly 12 per cent in early trade after the company revealed tehe development which was attributed for the net loss in fourth quarter.

For the fourth quarter ended October 31, HP registered a net loss of USD 6.9 billion compared to a profit of USD 0.2 billion in the same period last year.

HP said it has referred the matter to the US Securities and Exchange Commission's Enforcement Division and the UK's Serious Fraud Office for civil and criminal investigation.

It had launched an internal investigation into these issues after a senior member of Autonomy's leadership team came forward, following the departure of Autonomy founder Mike Lynch, it added.

PTI



First Published: Tuesday, November 20, 2012, 23:18


Comments


comments powered by Disqus
BRICS Annual Summit 2014
BRICS Annual Summit 2014
Tata Zest Standout Features: In Pics
Tata Zest Standout Features: In Pics
New car launches in July
New car launches in July
Tata Zest first drive review: In pics
Tata Zest first drive review: In pics
Google I/O 2014
Google I/O 2014

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved