The former CEO of Autonomy Mike Lynch sent an open letter to HP’s board of directors for accusing his company of “serious financial impropriety.” Saying it was “shocking” that the company made the allegations public without first contacting him, he also said that “I utterly reject all allegation of impropriety”. He went on in the letter to defend the accounting done at Autonomy, which was handled by Deloitte.
“On 20 November Hewlett-Packard (HP) (HPQ) issued a statement accusing unspecified members of Autonomy’s former management team of serious financial impropriety,” said Dr. Mike Lynch, the former CEO of Autonomy, in his letter. “It was shocking that HP put non-specific but highly damaging allegations into the public domain without prior notification or contact with me, as former CEO of Autonomy.”
Lynch demanded Hewlett-Packard answer questions regarding its allegations against Autonomy financial practices, including HP’s claim that a $5 billion write-down was necessary on Autonomy.
“Can HP really state that no part of the $5 billion write down was, or should be, attributed to HP’s operational and financial mismanagement of Autonomy since the acquisition?” Lynch said in the letter.
On Tuesday, HP quickly response back to Lynch’s letter to the board. The company said it believes it has uncovered extensive evidence of a willful effort on the behalf of some of Autonomy’s employees to inflate its underlying financial metrics. It said it was an effort to mislead investors and potential buyers.
“While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders. In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury,” the company said in a statement.
Ref: Yahoo Finance, USA Today