UK regulators probe Autonomy accounts

  @MarkThompsonCNN February 11, 2013: 12:51 PM ET
autonomy hp mike lynch

Former Autonomy CEO Mike Lynch has denied charges that his company engaged in accounting fraud.

LONDON (CNNMoney)

British regulators have launched an investigation into the published accounts of Autonomy, the embattled software company Hewlett-Packard bought for more than $11 billion in 2011.

The Financial Reporting Council said in a brief statement it had begun looking into accounts issued between January 1, 2009 and June 30, 2011. The FRC is an independent and investigative body for accountants and actuaries. It has the power to impose unlimited fines and withdraw licenses.

HP (HPQ, Fortune 500) wrote down the value of Autonomy by $8.8 billion last year, saying it had uncovered "serious accounting improprieties" including "outright misrepresentations" that occurred before it bought the company.

HP said in late December that the U.S. Department of Justice is similarly looking into HP's claims.

Autonomy develops database search and other enterprise software technologies. Many analysts said HP had overpaid for the company given it had never made more than $1 billion in annual revenue. HP paid a premium of 58% over the share price at the time.

Related: HP mocks Dell buyout. Really HP?

Mike Lynch, co-founder and former CEO of Autonomy, has denied the allegations.

In a statement issued Monday on behalf of the former Autonomy management team, Lynch said the accounts had previously been reviewed by the FRC, and no actions or changes were recommended or required.

"Autonomy received unqualified audit reports throughout its life as a public company," he said. "We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the FRC." To top of page



Join the Conversation

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.