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March 12, 2013

SFO investigates Autonomy and HP deal

The UK’s Serious Fraud Office (SFO) has begun investigations into the sale of technology firm Autonomy to Hewlett Packard (HP).

Before the SFO are able to proceed with the investigation it has to look at a potential conflict of interest arising from the watchdog currently using an Autonomy software product, Introspect. A statement for the SFO said that, in order to avoid a conflict of interest, the SFO is "obliged, as a first step to make enquiries to ensure that it can continue as the investigating body."

HP bought the British software firm in 2011 for $10bn, but has since had to write off $5bn from the deal, claiming Autonomy had drastically inflated its value, something Mike Lynch, the former chief executive at Autonomy, denies.

The deal is already being investigated by the US Department of Justice, the Securities and Exchange Commission and the UK Financial Reporting Council has just recently launched an investigation into the actions of the Big Four accounting firms involved in the deal.

At the time of the acquisition Autonomy was audited by Deloitte UK and HP is audited by Ernst & Young, and there have been calls since the scandal broke in October 2012 by investor groups for HP to replace E&Y.

KPMG was also drafted in at the time of the acquisition to oversee some of the work done by Deloitte.

Related Link

Serious Fraud Office

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