HP Executives Were Aware Of Autonomy’s Loss-Making Hardware Sales: FT

Hewlett-Packard Co’s senior executives were aware of Autonomy Corp’s accounting practices months before a whistle-blower flagged them, prompting HP to write down Autonomy, the Financial Times reported citing email records.

Palo Alto, California-based HP has said it was a victim for having paid $11.1 billion to buy Autonomy in 2011. It took a writedown of $8.8 billion in November 2012, accusing Autonomy officials of accounting fraud.

Autonomy’s practice of selling hardware to clients at a loss had been documented by auditors and a report was provided to HP after it bought the British software maker, FT said.

HP executives were included in communications about Autonomy’s hardware sales before the whistle-blower brought the transactions to light, FT said, citing several emails. (link.reuters.com/hev86v)

In an October 2011 email that Chief Executive Meg Whitman was copied on, Autonomy cited difficulties it was having in selling HP hardware, the newspaper reported.

However, HP said that while it eventually learned about the hardware sales, it knew nothing of the accounting improprieties until the whistleblower came forward, FT said.

Autonomy’s former Chief Executive Mike Lynch and HP could not be immediately reached for comment by Reuters outside of regular business hours.

Source : Reuters