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As if losing $8.8 billion thanks to alleged accounting malfeasance at its newly acquired Autonomy Corp unit wasn't bad enough, Hewlett-Packard is now facing a lawsuit from an investor over the deal. The shareholder claims HP hid Autonomy's problems, issuing false and misleading statements, Bloomberg reports. "At the time Hewlett-Packard agreed in principle to acquire Autonomy, defendants were looking to unwind the deal in light of accounting regularities," the suit alleges. It also accuses HP of hiding negative portents for its enterprise services business.
There were lots of red flags HP could have spotted before buying Autonomy, the Wall Street Journal reports. The company appears, for example, to have "sold" goods to companies by buying their customers' products in return, listing the expense in an oft-ignored corner of its balance sheet. But Autonomy founder Mike Lynch says the allegations are false, telling the New York Times it was "a bit of a shock" when HP leveled them. He says Autonomy's sales plummeted because of HP's mismanagement. "They drove out the top 100 people from Autonomy," he says. "HP salesmen got better commissions for selling our competitors' products."
