Autonomy's emails show company's revenue 'fell away completely', claims HP
But Autonomy claims email is taken 'wildly out of context'
Former employees of UK-founded Autonomy, which is owned by HP, knew of financial problems at the company, with emails from an ex-finance director suggesting that the firm was struggling with revenues.
The email, which is found in the lawsuit filed in the US by HP, and was written at the tail-end of 2010, goes on to suggest that the firm was riddled with "swathes of reps with nothing to do". It is said to be one of several emails that HP says proves that Autonomy had fiddled with its numbers.
Autonomy was sold to HP in October 2011 for $11.1bn (£7bn), but after lacklustre sales a major dispute erupted between HP and senior figures at Autonomy that led to HP reporting Autonomy to the authorities over what it called "accounting irregularities", and writing down $8.8bn (£5.9bn) from its value.
One email from Autonomy's former CFO, Sushovan Hussain, that was sent to Autonomy founder Mike Lynch at 1:19am on December 10 2010, said: "Really don't know what to do mike. As I guessed revenue fell away completely."
"We've covered up with bofa and hopefully db and Doi but if latter two don't happen it's totally bad. There are swathes of reps with nothing to do maybe chase imaginary deals."
‘Bofa' refers to the Bank of America Merrill Lynch, which was an Autonomy client at the time. The email, entitled "US idol", was supposedly a response to company's IDOL product performing badly.
In the court filings HP said that it "did not miss the fraud at Autonomy because it wasn't diligent enough. The problem was Autonomy executives had lied. Repeatedly."
The email also suggests that Autonomy's divisional heads were keeping their own accounts of sales, HP said, and that Hussain ended with a plea for "radical action".
HP claims this radical action was to "sell the company", and ultimately this did happen less than a year later.
The emails have formed part of a case in the US over whether HP should be allowed to settle with shareholders pursuing its directors for approving the Autonomy acquisition.
In response, representatives for Autonomy's former executives claim that Hussain's email was taken "wildly out of context". Stating that the company's forecast for the quarter was still ahead of target.
"It is not hard, when going through hundreds of thousand of emails to pick a misleading example if you are prepared not to release other emails around it," the representatives said.
HP meanwhile claims that it will bring lawsuits against Lynch, Hussain, Deloitte & Touche and others.