The Channel logo


By | Anna Leach 11th February 2013 17:29

UK financial watchdog bends Autonomy over for fresh probe

Financial Reporting Council sniffs allegations surrounding Brit software biz

HP-owned software house Autonomy faces more probing, this time by the Financial Reporting Council (FRC).

The British corporate governance watchdog announced today it will investigate allegations that the Brit biz overinflated its value by $5bn just before Hewlett-Packard bought it in 2011.

HP's buy-up of Autonomy for $10.7bn is under investigation by the US’s Department of Justice; the acquisition was also referred to the US Securities and Exchange Commission and the UK’s Serious Fraud Office.

The tech titan is also on the receiving end of several lawsuits from shareholders after it was forced to write down $8.8bn in November last year as a result of the purchase. HP alleged that $5bn of the write-down was due to reporting irregularities by Autonomy, whose co-founder Mike Lynch has denied any wrongdoing.

Four of the big global accountancy firms are caught up in the row: Deloitte audited Autonomy in 2010, KPMG was brought in to conduct due diligence, PricewaterhouseCoopers monitored the takeover and Ernst & Young audited HP.

The Financial Reporting Council will now sift through the published financial reporting of Autonomy for the period between 1 January, 2009 and 30 June, 2011, and will take sanctions accordingly. The FRC has the power to discipline accountants. ®

comment icon Read 8 comments on this article alert Send corrections


Frank Jennings

What do you do? Use manual typwriters or live in a Scottish croft? Our man advises
A rusty petrol pump at an abandoned gas station. Pic by Silvia B. Jakiello via shutterstock

Trevor Pott

Among other things, Active Directory needs an overhaul
Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella


League of gentlemen poster - Tubbs and Edward at the local shop. Copyright BBC
One reselling man tells his tale of woe