HP comes out fighting against Autonomy

The maker of expensive printer ink, HP has claimed that Autonomy, the software firm it bought in 2011, overstated profits at one of its main British units by 81 percent in the year before it was sold.

HP had to write down the value of Autonomy by $8.8 billion and accused the management of accounting irregularities.

Autonomy was founded and led by British entrepreneur Mike Lynch, who has repeatedly denied the allegations. Until today, HP has not said anything specific about the write down.

Now, Reuters  is saying HP said it had refiled 2010 accounts for Autonomy Systems Limited, one of its British operating units, revising the annual revenue down by 54 percent to 81 million pounds.

Net profit for the period was reduced by $133 million according to the filing. The drop, $133 million at 2010 exchange rates, compares with reported 2010 net profit for Autonomy as a whole of $217 million, according to the company’s annual report.

Lynch had previously said that differences in IFRS and US GAAP accounting standards appeared to have had a role in some of HP’s allegations.

However, HP was not mincing its words. It told Companies House in the UK that extensive investigations undertaken by Hewlett-Packard into the past accounting practices of the group, have revealed extensive errors, including misstatements, in the previously issued financial statements.

HP claimed that the reduction in profits was due to “fundamental errors”, with the remainder put down to differences in accounting policies used by HP and Autonomy.

Lynch’s spokeswoman, Vanessa Colomar, said that the size of the adjustments in the 2010 results did not fit with the scale of HP’s $5 billion writedown and he was continuing to reject these allegations by HP.