Hewlett-Packard CEO Faces Lawsuit over Autonomy Deal
A further development in the dispute between US software group
Hewlett-Packard (HP) and Autonomy
, the UK company that it acquired in 2011, has seen HP’s chief executive officer (CEO), Meg Whitman, accused of making false claims over the £7.8bn acquisition in a lawsuit brought on behalf of shareholders.
The lawsuit, filed in federal court in San Francisco, claims that Whitman and other directors of the group failed in their fiduciary duties to shareholders in acquiring the firm. “Rather than evaluating this important transaction with eyes wide open, HP’s fiduciaries consciously decided to proceed with eyes closed shut, ignoring the warnings of their own professional advisers,” according to the lawsuit.
“Compounding the problem, after the acquisition closed, HP’s fiduciaries misrepresented the facts to conceal their own failings.’
Whitman announced in November that HP was writing down the value of Autonomy by US$8.8bn due to alleged “serious accounting improprieties” at the company and said former unspecified members of the Autonomy board had misled investors over the true value of the firm. HP called on the UK’s Serious Fraud Office (SFO) and the US authorities to investigate.
Autonomy’s former CEO, Mike Lynch, and other members of the Autonomy management team said they “utterly rejected” all allegations of impropriety.
According to the US lawsuit, Whitman was “directly supervising Autonomy and Mike Lynch and therefore faces personal liability for her failure to manage and supervise” them.