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Autonomy Facing Justice Department Inquiry

Autonomy Facing Justice Department Inquiry

Autonomy is the subject of a Justice Department investigation over improper accounting under previous management.

The software company was recently acquired by Hewlett-Packard, who claims that they were misled by improper bookkeeping.

The Washington Post reports that, in a filing with the Securities and Exchange Commission on Thursday, HP claimed that Justice officials opened an investigation into the matter on November 21.

HP initially brought the allegations forward in early November, saying that they uncovered the discrepancies after a senior Autonomy executive came forward to show them.

HP added that they are fully cooperating with the investigation, as well as all three government agencies currently involved. They added that they provided information to the SEC, as well as the UK Serious Fraud Office over “accounting improprieties, disclosure failures and misrepresentations at Autonomy.”

The Huffington Post notes that Mike Lynch, the founder and former head of Autonomy, has asserted that he will defend his former company’s accounts to US federal investigators. The British software did not deliver the growth that was expected of them in the year after they were purchased by HP for $11 billion.

HP announced the decision in November to write off about $5 billion of Autonomy’s value, accusing the software firm’s former management of cooking the books to inflate the company’s value before the sale.

Lynch has since launched an opposition attack against HP. On Friday he announced that he was still waiting on HP to give him a detailed calculation of the write-down, as well as a statement that explains the allegations in detail. Lynch stated:

“We continue to reject these allegations in the strongest possible terms. Autonomy’s financial accounts were properly maintained in accordance with applicable regulations, fully audited by Deloitte and available to HP during the due diligence process.”

HP has refused to give any information to Lynch, saying that they will wait for the legal process to disclose the information he asks for.

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