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By | Paul Kunert 22nd November 2012 13:59

'Brit Bill Gates' Lynch: Only Mad Leo Apotheker understood Autonomy

'I'm not going to be HP's scapegoat'. Errm ...

The origins of Autonomy's declining fortunes can be traced back to the moment HP axed its former hapless CEO Leo Apotheker, claims Mike Lynch, the founder of the Brit software firm.

This comes as Autonomy is accused of "accounting improprieties and misrepresentations ... prior to 2011 acquisition by HP" by the Palo Alto tech monster's new management.

HP this week wrote down a thumping $5bn, which it said was necessary because Autonomy had cooked its books to inflate its sale price.

Lynch is not taking the allegations lying down and has been to the media attempting to clear his company's name, telling Sky News:

"I've had a chance to read a bit of what's been said and it just doesn't make any sense; I flatly refute that there is anything in it."

In a series of side-swipes at HP, he said that despite the "PR noise" from HP he had not heard from the company or its legal representatives and questioned why it had adopted this strategy.

"This is a company that is in utter chaos. [On Tuesday] it delivered its worst results in 70 years - perhaps it's a coincidence perhaps it's not. But I'm not going to be HP's scapegoat for the fact the company is in utter disarray," said Lynch.

He claimed every Autonomy invoice is sent to its UK auditor Deloitte each quarter, rather than on a half-yearly basis, and claimed the accountant had gone public to say it found no errors.

Deloitte sent a statement to us:

Deloitte categorically denies that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy's financial statements ... we are unable to discuss our audit work further due to client confidentiality.

The write-down was a consequence of HP's mismanagement of Autonomy, Lynch argued, and pointed to the recent $8bn write-down on EDS, and the $1.7bn on Palm.

"Its on its fourth CEO in the blink of an eye", said Lynch.

HP had hauled in 300 people that "crawled over" the books of the Cambridge-based developer and found nothing wrong "because there was nothing wrong", he said.

After the deal had been signed and sealed late last year a very different Lynch had said HP understood the culture at Autonomy, but all that went out of the window when "the CEO changed".

He talked of the divisional factions inside HP, a "modernising faction" interested in "doing more software, higher value business," and the legacy hardware guys - HP's core.

"Leo Apotheker who did the deal and Shane Robinson the CTO that saw the vision of taking Autonomy and building a big software business in HP, the problem was that they were ousted in a coup d'etat, one of the many that goes on there.

"Suddenly we were in a situation where we no longer fitted what was a flip-flopping strategy; at that point things started to unravel," said Lynch.

He added all sort of "roadblocks" were put in front of Autonomy's staff who were "treated badly", and told "software talent is mobile". He added that many had hot-footed it out of the door, along with senior management and eventually Lynch himself.

Lynch must be alone in talking up the leadership of Apotheker, who sent HP's share price into freefall - something current boss Meg Whitman has been unable to stabilise.

During a 10-month tenure, Apotheker signed the $10.2bn Autonomy deal, made public that it was reviewing future ownership of the PC business and dumped its WebOS hardware.

Apotheker is now a non-exec director at Steria. ®

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