Tag: stanley morrical

Shareholder accuses HP of lying about Autonomy write-down

An HP shareholder has accused it of lying about the reasons for the $8.8 billion write-down following its Autonomy buy in a lawsuit filed in a US court.

The lawsuit, filed by Stanley Morrical, who owns 1,200 shares in the computing giant, claims that promises around an integrated platform using Autonomy were not delivered.

The lawsuit states that a Next Generation Information IDOL 10 product was promised when the firm paid $11.7 billion for the British software, combining software with HP’s Vertica technology.  Morrical says that such a product has not yet been delivered.

The case, filed in a San Jose District Court, claims that it is this lack of product development which is to blame for the write-down, rather than the fraudulent accounting practices that HP has alleged.

“The integrated Next Generation Information Platform that HP claimed existed did not exist in the form that was announced,” the court filing claims, “it was a fraud – not accounting fraud as stated by HP – but a more fundamental and foundational fraud because HP did not and does not have the revolutionary product it promised the public, its customers and its shareholders.”

Morrical is also alleging that the board of directors were fully aware of Autonomy’s inability to deliver on “next generation” products, claiming that “HP’s officers and directors know that they wasted $11.7 billion worth of HP’s corporate cash to buy a company with an outdated product with multiple competitors.”

HP has claimed that of the $8.8 billion write-down, around $5 billion has been down to ‘accounting improprieties’ at Autonomy prior to the sale of the company.   This includes ‘channel stuffing’, with allegations that software licences, which were sold to resellers but not to customers, were included in its sales.

Former Autonomy boss Mike Lynch has denied the allegations, countering that the board of directors should have been fully aware of the financial well being of the company.  

Leo Apotheker, HP CEO at the time of the Autonomy purchase, also weighed in to claim that the blame was with the board of directors.

Other investors also filed lawsuits last month after the write-off caused HP’s shares to plummet.