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Autonomy Chief Says Whitman Is Watering Down HP Fraud Claims 117

Posted by timothy
from the series-of-tangled-webs dept.
McGruber writes "Possibly the wierdest tax-writeoff of the year happened when Meg Whitman claimed that her US-based multinational corporation HP had been defrauded by British-software firm Autonomy; Ms. Whitman and HP claimed an 8.8 billion dollar write-down. As the Los Angeles Times explains, 'HP acquired Autonomy in 2011 for $11 billion, a move it hoped would turn it away from its dependence on sales of computer hardware with its low profit margins, and into the more profitable business of software. However, the price HP paid was widely criticized for being too high, and in part led to the subsequent ouster of Chief Executive Leo Apotheker.' The wierdness continues — in its annual report filed with the U.S. Securities and Exchange Commission, HP claims that the U.S. Department of Justice has opened an investigation into HP's allegations that HP has uncovered widespread accounting fraud at Autonomy. However, The Guardian points out that former Autonomy CEO Mike Lynch claims that HP 'is watering down the accusations it had levelled against him over the accounts filed by his old software company.' Mr. Lynch also says that he has not been contacted by the U.S. Department of Justice, which HP claims is investigating the alleged fraud. Perhaps Slashdot's users can help make sense of this mess and help explain it to me?"
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Autonomy Chief Says Whitman Is Watering Down HP Fraud Claims

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  • Smoke and mirrors (Score:5, Interesting)

    by girlintraining (1395911) on Sunday December 30, 2012 @12:27PM (#42426733)

    Perhaps Slashdot's users can help make sense of this mess and help explain it to me?"

    You don't have to delve too deeply into this one, to be honest. The company took a risk. It lost at the gambling table. Badly. And now it's looking for someone, or something, to blame. And the only way to reduce their debt load without screwing someone over a barrel is if some vaguely-defined "fraud" is found in the accounting books, thus saving HP of a lot of tax money and reducing the liability. Everything else is smoke and mirrors.

  • Clown show (Score:5, Interesting)

    by Anonymous Coward on Sunday December 30, 2012 @12:34PM (#42426783)

    On the sell side, we have this. [oracle.com]

    I'll let others comment on the buy side.

  • by Anonymous Coward on Sunday December 30, 2012 @12:52PM (#42426899)

    HP paid $11bn for Autonomy, despite Autonomy showing only $3.5bn of total assets (as of June 2011). HP recorded nearly $7bn of Goodwill (difference between the price HP thought it was worth and what the rest of the market thought it was worth) and surprise, surprise the market knew better than HP.

    HP's story simply does not stack up - it would mean Autonomy were fiddling their books to the tune of $5bn on a $3.5bn balance sheet. Much more likely is that HP vastly overpaid and are now trying to shift the blame, I'd expect these charges to get even more diluted in the near future.

  • by Shoten (260439) on Sunday December 30, 2012 @01:01PM (#42426961)

    Someone is lying

    Well, yeah...it's HP we're talking about. I mean, this is the company that spied on journalists who didn't say nice things about their products. Anytime you have a company that gets dragged before Congress to account for what they've done, you know something's wrong. Anytime you have a company whose actions resulted in new laws to clarify why what they did should be illegal, you know someone's willing to play around with the fine line between simply immoral and actually illegal. And people that make such distinctions...or think they count, in an ethical sense, are nothing more than intelligent lowlives.

  • by deadgoon42 (309575) * on Sunday December 30, 2012 @01:09PM (#42427029) Journal
    You just hit the nail on the head of why customers and employees of once great companies now hate those companies. Their management knows little to nothing about the business itself, they only know how to look at a spreadsheet and run a trend chart. At my last job, we spent most of our time making charts go up and boxes turn green. These had little to no positive effect on our business and often just made things worse. If things got too bad, we'd just make up numbers or manipulate them in such a way as to make them what the managers wanted. Since the managers didn't know anything about the real world happenings, they were none the wiser. A terrible way to run a business, but it seems that's how most are run nowadays.
  • Re:Clown show (Score:4, Interesting)

    by WrecklessSandwich (1000139) on Sunday December 30, 2012 @03:44PM (#42427865)
    "We still have his powerpoint slides."

    Normally I'm not a fan of Oracle (who is?), but good on them for shutting Lynch down with actual facts.
  • Re:Smoke and mirrors (Score:5, Interesting)

    by homey of my owney (975234) on Sunday December 30, 2012 @04:22PM (#42428093)
    No, it does not cover the details of the confusing part.

    Moreover, it incorrectly implies that Enterprise Services is Autonomy. The first hammer to fall in August was the write down of $8B for the acquisition of EDS --- NOT Autonomy. The November write down of $8.8B was for Autonomy.

    The only thing clear here is that HP had a mess of losses associated with Enterprise Services, and that the first hint that things were really hosed was when they identified EDS as the reason for the first $8B+ write down.
  • by Anubis IV (1279820) on Sunday December 30, 2012 @09:06PM (#42429781)

    She's the one cleaning up the mess, not the one that made it (though how well she's doing is certainly open to debate). That credit goes to Leo Apotheker, who, as the summary pointed out, was ousted largely due to the whole Autonomy buyout that he oversaw, but that was far from the only mess he made; he was also the one who announced plans to shut down HP's PC business. Whitman is just trying to put as much distance between the company and that deal as she can at this point, that way they can move on.

    As for eBay, she started there when it only had 30 employees, so it's not like she came in when it was the massive (though garish) success it is now and just kept it running. And what destruction has she left behind elsewhere? Last I checked, after she left eBay, she more or less took a break for a few years, serving on the boards at a few different companies that seemed to do rather well with her helping them (e.g. Dreamworks). And since coming on as CEO at HP, she's been systematically undoing the damage her predecessor did before he floated away on a golden parachute. Whether or not she's succeeding is not something I want to argue, since I don't think I'm well-informed on that subject, but it looks to me like the blame lies elsewhere, and that she's just trying to get them out of it.

    I'm not a fan of Whitman either, but let's at least be fair in our treatment and rely on actual facts, rather than generalizations that don't seem to line up with reality.

God may be subtle, but he isn't plain mean. -- Albert Einstein

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