HP has slammed former members of management at Autonomy, the UK software house it acquired last year in a deal worth $12 billion. It has accused them of "inflating" the value of the company prior to the takeover as part of a "wilful effort to mislead". This led to a $5 billion charge in its latest quarterly accounts.

A statement issued by HP notes: “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. These efforts appear to have been a wilful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal. We remain 100 per cent committed to Autonomy and its industry-leading technology.”

HP launched its internal investigation into these issues after a senior member of Autonomy’s leadership team came forward, following the departure of founder Mike Lynch, claiming that there had been a series of questionable accounting and business practices at the company prior to the acquisition. HP initiated an internal investigation, including a forensic review by PricewaterhouseCoopers of Autonomy’s historical financial results, under the oversight of John Schultz, executive vice president and general counsel, HP. As a result of that investigation, it now believes that Autonomy was substantially overvalued at the time of its acquisition.

The Silicon Valley giant says that 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.

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