Shareholders round on HP over Autonomy imbroglio
Class action suit alleges that HP knew more than it let on about Autonomy and EDS businesses
HP is being sued by shareholders over last week's $8.8bn (£5.5bn) Autonomy write-down.
Robbins Geller Rudman & Dowd – a law firm that claims to represent defrauded investors – yesterday filed a class action suit against the vendor on behalf of shareholders who bought HP stock between 19 August 2011, when its acquisition of Autonomy was first announced, and 20 November 2012.
On 20 November, HP announced an $8.8bn impairment charge relating to the Autonomy acquisition, of which more than $5bn was linked to alleged accounting improprieties unearthed following an internal probe.
Autonomy founder Mike Lynch, who left HP in May, has strenuously denied the allegations, since launching a stinging attack of his own against his former employer.
Robbins Geller Rudman & Dowd's complaint alleges that HP concealed that it had gained control of Autonomy last year "based on financial statements that could not be relied upon because of serious accounting manipulation".
It also claims that HP concealed "known negative business trends" concerning the profits of its services business, which was based on HP's 2008 acquisition of EDS.
"It is hard to imagine that [the Autonomy] deal goes so far south so quickly without somebody having culpability," Dominic Auld, a partner with Labaton Sucharow, another law firm that is exploring whether to file a securities class action suit of its own, was quoted as saying in the FT this morning.
A string of poor results, leadership changes and questionable strategic decisions have hammered HP's share price over the past 18 months.
The value of the vendor's shares plunged from $23.60 to $11.71 over the course of the class action period mentioned above, but was as much as $41 in May 2011.
According to the FT article, the lawsuit, which was filed in San Francisco, named HP, alongside current and previous chief executives Meg Whitman and Léo Apotheker, chief financial officer Cathie Lesjak and former chief accounting officer Jim Murrin.
HP told the newspaper it was reviewing the claims, but had no further comment.