More news on the epic battle between Hewlett-Packard (HP) and UK-based software company Autonomy. The Serious Fraud Office (SFO) said today it has closed its investigation into the British company, despite accusations from HP that it had committed accounting fraud.
Autonomy, then a darling of the UK's technology startup community, was sold to HP for $11.7bn (£7.7bn) in 2011 – an eyebrow-raising 47 times its annual pre-tax profits.
Shortly afterwards, HP took a massive $8.8bn writedown on the company and fired founder Mike Lynch, alleging that the company had engaged in "improper accounting practices" and covered up falling revenues.
But today the SFO said it had found "insufficient evidence for a realistic prospect of conviction".
Unfortunately, this is unlikely to be the end of the line for the the epic war of words, which has been raging on since 2012.
The Financial Reporting Council (FRC) today confirmed that it is still investigating Autonomy, while US authorities continue to look into the case.
HP has also declared its intention to launch lawsuits against both Lynch and Autonomy's then-chief financial officer, Sushovan Hussein,
Lynch himself has denied all the allegations of fraud throughout the controversy. At the end of last year, he claimed a new document had come to light that "unambiguously [showed] that the writedown was driven by accounting policy changes and differences, not fraud".
In September, he also pointed out that HP had assumed $7.4bn revenue synergies on a business with a market valuation of just $6bn.
In a statement today, Lynch said:
We welcome the SFO's decision to close its investigation. As we have always said, HP's allegations are false, and we are pleased that after a two-year review of the material presented by HP, the SFO has concluded that there is not a case to pursue.Let's remember, HP made allegations of a $5 billion dollar fraud, and presented the case in public as a slam dunk. HP now faces serious questions of its own about its conduct in this case and the false statements it has made.
As the SFO made clear, the US authorities are continuing their investigation and we continue to cooperate with that investigation.