Autonomy: HP Accurately Accused

HP filed serious allegations against the original management of Autonomy, which it acquired at a price of 11.1 billion U.S. dollars in October 2011, claiming that the original management of Autonomy exaggerated the company's performance before the company was acquired.

In response to this allegation, Autonomy founder Mike Lynch accepted an interview with the media on Tuesday and talked about his views on the matter. Lynch said that he did not know in advance that Hewlett-Packard is preparing these allegations, and that the allegations made by Hewlett-Packard were completely wrong and he strongly denied it. Lynch accepted the interview as follows:

Q: When did you know these accusations?

A: We have no knowledge in advance. We have been kept in the dark. It was not until 1 pm UK time that we knew about it when HP issued a press release.

Q: You did not know in advance that such a thing would happen?

A: I don't know.

Q: They made very serious accusations against Autonomy. They did not name their names. How do you react to these allegations?

A: Those accusations are completely wrong. We strongly deny it.

Q: Do you know how these accusations were introduced?

A: It is not clear because HP did not provide any details.

Q: The accusations included irregular accounting actions, false prices, etc. All this was audited by the auditors. You are an FTSE100 company.

A: We will be audited every quarter. Deloitte is responsible for auditing and Deloitte understands our company. We have been listed for 10 years. During that time, Deloitte's work was supervised by the boards of many companies. Of course, HP did what its executives called “meticulous due diligence”. Hundreds of people participated in the investigation. The investigation was very detailed and KPMG Barclays participated. They dumped everything to KPMG Barclays.

And they took over Autonomy for four quarters and they have been recording Autonomy's business performance.

The data is not trustworthy. At that time, HP took over $ 12 billion worth of assets, but now they say that 9 billion of them were missing. At that time, more than 300 people and so many companies had conducted due diligence. How could they not have found such a thing?

Q: Do you know how they got this data? Or where did the data come from?

A: I don't know. The only thing I know is that when they presented these data and allegations, HP just issued the worst earnings report in its 70-year history.

I think this is because they themselves have messed things up. They also acquired EDS and then wrote down the latter’s assets. They also acquired Palm and later wrote down its assets. At the time of the acquisition of Autonomy, HP's chief executive Mark Hurd hoped to abandon most of Autonomy's business and only obtain its software business.

Hurd was fired by the company for some reason. From that perspective, Autonomy is not in line with HP's main business unit.

HP also made some mistakes in managing Autonomy. They lost hundreds of talents and the entire management team basically disappeared. This is a sad thing. After the management went out of business, all the company's value was destroyed.

Now, Hewlett-Packard is trying to cover this fact with a huge write-down of assets.

Q: When did you leave HP?

A: I left at the end of April.

Q: When you leave HP, is Autonomy still OK?

A: Not good. The situation at the time was that because of what HP did, they lost many of the company’s valuable things. I was the last person left in the management of the company.

The status of the company is not good, but I still try my best to abide by the various rules that they introduced when purchasing the company.

Q: How do you feel about this? This is a company that you personally created. You have been in the company since the company was founded. The company faces such serious accusations. How do you feel about this?

A: We completely deny those accusations. Once HP makes more new evidence, we will prove it to be wrong. What really grieves the management of the company is that we have run a company for 10 years and made it a global market leader. However, in the year after HP's acquisition, Autonomy has completely destroyed.

I think you must review the company assets in this way. I think that things may be such a step-by-step development to this day. Autonomy is a talent-related company. Obviously, Hewlett-Packard has a group of great talents inside. I hope they can develop great products.

Q: Did anyone contact you? HP has already had contact with SFO (Serious Fraud Office). Have anyone ever contacted them?

Answer: No. No one has ever visited us. We only heard of press releases issued by HP.

Q: Is there something else that is puzzling?

A: I can't understand how Hewlett-Packard could write down $9 billion in assets, and said that all this is because more than 300 people before it did not find those problems when conducting "meticulous due diligence." If so, then HP is wrong.