Updated: Mike Lynch, the former Autonomy CEO and the leader of the management team who sold the company to Hewlett-Packard last year, has denied charges that Autonomy misled its buyer.
Update: In an interview with The Wall Street Journal, Lynch said he’d been “ambushed” by the charges, which he called “utterly wrong.”
“We were audited on a quarterly basis. It was Deloitte, who knew the company well. We had 10 years as a listed company; during that time Deloitte would have had their work reviewed by the various boards. Of course H-P did what its senior management called “a meticulous due diligence” involving hundreds of people that was highly intense, involving KPMG Barclays well. They threw everything at it.”
And in another statement obtained by Reuters:
“The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false … HP’s due diligence review was intensive, overseen on behalf of HP by KPMG, Barclays and Perella Weinberg. HP’s senior management has also been closely involved with running Autonomy for the past year.”
On Tuesday morning’s HP fourth-quarter earnings call, CEO Meg Whitman leveled the allegations that Autonomy management had misrepresented the company’s performance and failed to disclose information that HP should have had prior to closing its acquisition. “These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal,” according to an HP statement.
Whitman’s predecessor Leo Apotheker had launched a $10.3 billion bid for Autonomy in the summer of 2010. The purchase price ended up being $11.1 billion when it closed a few months later. Lynch (pictured above) left HP suddenly in May 2011, as the company reported disappointing Autonomy sales.
The Autonomy acquisition has been controversial from the get-go. News of it leaked in advance and even at the time of the announcement most onlookers felt that the offer price was very high for the U.K.-based company.
For her part, Whitman has laid the blame on HP’s side of the equation on Apotheker and former Chief Strategy Officer Shane Robison, who left within weeks of Apotheker’s ouster in September 2011.