Mike Lynch defends Autonomy accounting methods
The founder of enterprise search and knowledge management service company Autonomy is firing back at HP amid allegations that his company used sketchy accounting practices to inflate its value prior to its sale to HP in August 2011.
Autonomy – a lesson in due diligence
In an interview with the Wall Street Journal , Lynch said of HP’s allegations that “they are completely and utterly wrong and we reject them completely.”
This morning HP revealed that it will take an $8.8 billion impairment charge due to what it calls “serious accounting improprieties, misrepres
entations, and disclosure failures” by Autonomy in the run up to its acquisition. HP claims that a “senior member” of Autonomy’s leadership came forward after Lynch left the company, spurring a forensic review of Autonomy’s accounting practices.
Lynch told WSJ that he was not aware of HP’s allegations before they were made public this morning. “We have been ambushed,” said Lynch. He pointed out that Autonomy was audited on a quarterly basis, and that HP was meticulous during its due diligence investigation into Autonomy before the acquisition.
“The figures are just mad,” said Lynch. “You are talking about handing them an asset worth $12 billion and they are saying $9 billion of that they are taking off. That would be such an obvious massive thing with 300 people and all these firms doing due diligence, how could you possibly not spot it?
Autonomy Founder Fires Back at HP Amid Accounting Fraud Claims: The founder of enterprise search and knowledge m…
— Joy (@GlobalOnlineBiz) November 20, 2012