Software firm accused of misleading investors [Newcastle Journal (England)]
(Newcastle Journal (England) Via Acquire Media NewsEdge) THE accounting watchdog has said it has opened an investigation into the software company accused of misleading investors prior to its multi-billion dollar takeover by American giant Hewlett- Packard.
The Financial Reporting Council (FRC) will examine Cambridge- based Autonomy's books in the period between January 2009 and June 2011 - three months before it was bought by the US firm in a Pounds 7.1bn deal.
HP recently wrote off Pounds 5.1bn from quarterly earnings, with the majority linked to its accusations of "serious accounting improprieties, misrepresentation and disclosure failures" at Autonomy.
Referring the matter to the Serious Fraud Office (SFO), the American firm alleged in November that former members of Autonomy's management fiddled accounts in a bid to "mislead investors and potential buyers".
Autonomy founder Dr Mike Lynch, who pocketed around Pounds 500m from the HP takeover, has always denied the allegations.
In a blog maintained by Dr Lynch on behalf of the former management team, he noted that as a member of the FTSE 100 Index the accounts of Autonomy have previously been reviewed by the FRC, including the period in question.
Dr Lynch added: "We welcome this investigation. Autonomy received unqualified audit reports throughout its life as a public company. This includes the period in question, during which Autonomy was audited by Deloitte. We are fully confident in the financial reporting of the company."
Autonomy was considered one of the UK's biggest technology success stories, having pioneered software that helps companies to search data, particularly in cases involving compliance and legal issues. Clients include Procter & Gamble, Nestle and Shell.
The FRC's decision to open an investigation followed consultation with the Institute of Chartered Accountants in England and Wales.
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