AN INVESTIGATION into accounting irregularities at software firm Autonomy was brought into doubt yesterday when the UK’s fraud watchdog admitted that a conflict of interest could scupper the probe.
The Serious Fraud Office (SFO) said that it may not be able to proceed with its investigation because its office uses software designed by Autonomy.
US computer maker Hewlett-Packard, which bought Autonomy for $11.1bn (£7.4bn) in 2011, had asked the SFO to investigate after it accused former management of inflating the business’s value in the run up to the acquisition.
HP took an $8.8bn writedown over the deal in November, sparking a war of words between chief executive Meg Whitman and Autonomy founder Mike Lynch.
Lynch claims he has been made a scapegoat for HP mismanaging Autonomy since the acquisition.
On Monday night, HP said the SFO had opened an investigation, but yesterday the office admitted it first had to determine if it was fit to proceed. In a statement yesterday it said: “It has been reported that the SFO uses an Autonomy product, Introspect, as a document management tool.
“The SFO is keen to ensure that there is now no conflict of interest, or perception of such a conflict and it is obliged as a first step to make inquiries to ensure that it can continue as the investigating body.”
Being forced to cancel the investigation would be the latest embarrassing blow to the SFO, which has recently bungled probes into the Tchenguiz property tycoons