HP CEO Léo Apotheker didn't even read Autonomy's accounts before acquisition
Apotheker claims he didn't have time to read Autonomy's accounts prior to $11bn acquisition
Léo Apotheker, the CEO of Hewlett-Packard who masterminded the company's acquisition of British software company Autonomy, didn't even read the company's accounts before signing off on the $11 billion deal.
Apotheker made the admission in cross-examination in the London High Court yesterday. HPE, HP's successor company, is suing former Autonomy CEO Mike Lynch and the company's chief financial officer, Sushovan Hussain, for $5 billion claiming that the pair had been responsible for masterminding an accounting fraud.
Are you saying at the time of an $11bn acquisition, you didn't have time?
Apotheker had claimed that if Autonomy's accounts hadn't been inflated by some of the deal highlighted by HPE in court then he wouldn't have pursued the acquisition of Autonomy.
In response, Lynch's lawyer Robert Miles QC suggested that the reason why Apotheker had not read the accounts was because he was more concerned with the company's technology - the accounts were of secondary interest. "That's one alternative. The other alternative was you were grossly negligent. Which is it?" asked Miles.
Apotheker claimed that he had people inside HP who kept him informed, and added that he probably didn't have time to read the accounts.
"Are you serious, Mr Apotheker?" added Miles. "Are you saying at the time of an $11bn acquisition, you didn't have time?"
"I'm running a $125bn company, minutes are precious!" responded Apotheker, who was ousted from HP before the deal had even been completed.
In written testimony, Apotheker claimed that he pursued the purchase of Autonomy because he believed it to be a "very successful, high-growth, high-margin, pure software company".
He cited the company's annual reports as "a key factor leading me to focus more on Autonomy as a potential acquisition target", subsequently recommending that the board open acquisition negotiations.
Last week in court it was claimed that HP carried out just six hours of due diligence on the deal in a process that involved just four one-and-a-half hour phone calls. The deal was rushed through, it was claimed, in order to deflect from a number of items of bad news that HP was also obliged to report.
The case is being covered in detail by The Register's Gareth Corfield.
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