NEW YORK Hewlett-Packard Co. took an $8.8 billion charge citing “a willful effort to mislead investors and potential buyers” at Autonomy Corp., the software company it agreed to purchase last year for $10.3 billion.
“HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP,” Palo Alto, Calif.-based Hewlett-Packard said Tuesday in a statement.
More than $5 billion of the total charge is due to accounting practices, which were disclosed by a senior executive at Autonomy after founder Mike Lynch departed, Hewlett-Packard said. Autonomy’s U.K. spokesman George Lockett didn’t have an immediate comment.
Former Hewlett-Packard Chief Executive Officer Leo Apotheker agreed to buy Autonomy, the second-largest U.K. software maker, to expand in cloud-computing and add software that searches a broad range of data, including e-mails, music, videos and posts on social networks such as Facebook Inc.
Acquiring it was part of an attempt by HP to strengthen its portfolio of high-value products and services for corporations and government agencies.
The case has been referred to the U.S. Securities and Exchange Commission and the UK’s Serious Fraud Office, HP CEO Meg Whitman said. The company will also try to recoup some of what it paid for Autonomy through lawsuits.
Information for this article was contributed by The Associated Press.