THE founder of the British technology firm at the centre of a multi-billion pound accounting scandal yesterday went on the offensive against computing giant Hewlett-Packard (HP), challenging the US company to answer questions over the allegations it made against his firm.
Mike Lynch, the founder and former chief executive of Autonomy, said he found it “shocking” to see HP allege serious accounting improprieties against former Autonomy management following HP’s $8.8bn (£5.5bn) writedown related to its $11bn acquisition of his business. In particular, he expressed anger that he had not been told of the allegations before HP released them publicly last week.
In an open letter to HP’s board, Lynch wrote: “It was shocking that HP put non-specific but highly damaging allegations into the public domain without prior notification or contact with me, as former CEO of Autonomy.
“I utterly reject all allegations of impropriety,” he added, as he called on HP to answer a list of questions related to its claims.
HP boss Meg Whitman said last week that senior members of Autonomy had inflated profit and revenue figures in the firm’s books before HP bought it last year.
She blamed these “serious accounting improprieties” for $5bn of the writedown, and promised civil and criminal legal action against those responsible.
HP hit back at Lynch yesterday following his letter. “While Dr Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders,” the company said.
“In that setting, we look forward to hearing Dr Lynch and other former Autonomy employees answer questions under penalty of perjury.”
The Autonomy founder’s move yesterday is bound to ignite speculation that Lynch, who was forced out of the firm in May, is set to launch formal action against HP, which he believes has sullied his reputation and made him a scapegoat for the company’s own failings.
A spokesperson for Lynch would not comment on legal strategy.
Lynch has made it clear he believes the blame for Autonomy’s disappointing performance while under HP’s ownership lies at the door of Whitman, who took the reins after the acquisition was announced.
He asked: “Can HP really state that no part of the $5bn write down was, or should be, attributed to HP’s operational and financial mismanagement of Autonomy since the acquisition?
“I have been truly saddened by the events of the past months, and am shocked and appalled by the events of the past week,” Lynch added.