Hewlett-Packard has settled three lawsuits with shareholders relating to its $11.1 billion acquisition of UK software maker Autonomy in 2011.
The lawsuits had accused HP CEO Meg Whitman and senior managers of not following up correctly on warning signs about weaknesses in Autonomy's financials.
Subject to court approval, all claims against HP's current and former directors, officers and advisers will be dropped. No financial details have been released.
The purchase of Autonomy was instigated by Whitman’s short-lived predecessor Leo Apotheker. However, under Whitman's leadership, an audit by HP of Autonomy's 2010 and 2011 financial documents found that one division of the company had alledgedly overstated its profits in the UK by over 80 per cent and its revenues by 50 per cent.
HP took an $8.8 billion charge in the wake of the findings.
But the fallout from the acquisition is not behind HP yet, as the allegations of accounting irregularities have sparked ongoing investigations by the Serious Fraud Office (SFO) in the UK and by the Justice Department, the Securities & Exchange Commission (SEC) and the FBI in the US.
The plaintiffs in the three lawsuits may now assist HP to bring claims against former Autonomy CEO Mike Lynch, former CFO Shushovan Hussain, and potentially others.
Lynch has consistently claimed that he did nothing wrong, and that shoddy management by HP and mishandling of Autonomy post acquisition has been to blame.
A statement issued on behalf of the former Autonomy management team said: “It seems Meg Whitman will be using a large sum of HP's money to avoid explaining in court why she made false allegations regarding Autonomy in November 2012.
"We continue to reject HP's allegations, and note that over recent months a number of documents have emerged that prove Meg Whitman misled her shareholders. We hope this matter will now move beyond a smear campaign based on selective disclosure and HP will finally give a full explanation."
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