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HP and shareholders forge Autonomy accord, ex-CEO Lynch under fire

updated 02:18 pm EDT, Fri June 27, 2014

Deal turns shareholders' lawyers eye to Autonomy executives

Hewlett Packard and shareholder's legal representation have agreed to a settlement over the company's acquisition of software developer Autonomy, which has been wracked with allegations, and counter-claims of fraud and misrepresentation. Under the terms of the agreement, all claims against HP have been dropped, but former executives of Autonomy are still under the microscope, with the HP shareholders' attorneys now assisting HP in pursuing claims against them.

Autonomy Corporation was a multinational enterprise software company founded in the UK in 1996. The company used a combination of technologies born out of research at the University of Cambridge. It developed a variety of enterprise search and knowledge-management applications using adaptive pattern-recognition techniques centered on Bayesian inference in conjunction with traditional search and data-mining methods.

HP alleges that an executive from Autonomy approached them after HP acquired the company, informing them that Autonomy's financial reporting was flawed and misleading. In announcing the write-down, HP accused Autonomy's former executives of a deliberate effort to inflate the company's financial metrics in order to mislead investors and potential buyers.

Reuters is reporting that claims are expected against CEO Michael Lynch, CFO Sushovan Hussain, and an array of other Autonomy officials. Lynch maintains that Autonomy executives denied evidence of problems, while at the same time, HP was leaking information to the media to bolster its accounting fraud claims. He also believes that HP knew exactly and accurately how many sales Autonomy had before it acquired the company, despite claims to the contrary.

The settlement terms are expected to be announced as soon as Monday, and validated with shareholders and HP before then. The agreement is unlikely to end US and UK financial regulatory investigations of the acquisition.



By Electronista Staff
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