HP is ‘smearing’ Autonomy, and ‘misleading’ shareholders – Mike Lynch

By Sooraj Shah
20 Mar 2014 View Comments
Dr Mike Lynch is the founder of Autonomy

Mike Lynch, the former CEO of Autonomy, has added fuel to the fire in his war of words with HP, claiming that HP is "smearing" the old management team at Autonomy, and "misleading" its shareholders.

Lynch was in charge of Autonomy when it was sold to HP in October 2011 for $11.1bn (£7bn), but left after lacklustre sales. This sparked a major dispute between HP and senior figures at Autonomy and was followed by HP reporting Autonomy to the authorities over what it called "accounting irregularities", and writing down $8.8bn (£5.9bn) from its value.

Further reading

In an open letter addressed to HP shareholders, Lynch said he wanted to "raise serious concerns about the way HP has conducted this affair".

"The evidence shows that HP is not just smearing us, but also misleading you, its shareholders. I ask you to help put things right," Lynch wrote.

He has put forward a number of questions for HP management to answer, claiming that it has not provided information or evidence to the Autonomy team to substantiate any allegation.

"Instead, it has selectively leaked documents and information to the international media, frequently using material taken out of context to create false impressions and smear our reputations," he said.

Lynch asks HP management how they can justify not showing Autonomy any evidence but yet have disclosed certain documents and emails to the media. He questions why HP hasn't revealed any alternative evidence of how Autonomy was not transparent with its auditors, and whether HP denies that senior managers had prior knowledge of Autonomy's accounting methods.

Lynch also asks HP why it wouldn't release its calculation for the write-down of the acquisition, and whether it would disclose its independent advisers' reports on the valuation of Autonomy - which he claims included Autonomy's hardware sales and was valued at $11bn (£7bn).

"[HP CEO] Meg Whitman has made incendiary and defamatory accusations on behalf of her company. She should now present the detailed evidence that justifies those allegations and a $5.5bn write-down in the value of your company," Lynch suggested to HP shareholders.

Last year, Lynch suggested that HP had not been able to innovate or retain talent in recent years. His suggestion was dismissed by HP, with a spokesperson stating that "innovation was at the heart of HP, evidenced by the company's leadership in almost every market it serves".

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