The Senior Fraud Office (SFO) in the UK has dropped the investigation into HP’s $10-billion acquisition of Autonomy, which took place two years ago.
Bloomberg News reports that the SFO closed the investigation yesterday saying it found “insufficient evidence for a realistic prospect of conviction”.
While the case has been closed in the UK, the Department of Justice in the US is still investigating, and the SFO has handed over its files to the US authority.
HP bought Autonomy for $10-billion but later says the company had overstated its financial health ahead of the acquisition – going as far as to say that $5-billion of the purchase price was effectively fraud.
In November 2012, HP says it had uncovered “accounting improprieties, disclosure failures, and outright misrepresentations” in Autonomy’s historical financials that may have inflated the $10-billion price that HP paid to acquire the company the previous year.
At that time, president and CEO Meg Whitman disclosed that HP had taken an $8,8-billion non-cash impairment charge related to Autonomy.
“The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures, and outright misrepresentations that occurred prior to HP’s acquisition of Autonomy and the associated impact on the expected financial performance of the business over the long term,” she says.
Whitman says the improprieties were discovered through an internal investigation after a senior member of Autonomy’s leadership team came forward following the departure of Mike Lynch in May 2012.
