HP Announces $9bn Assets Devaluation
Computer-tech firm Hewlett Packard announced a $9 billion devaluation of its assets during an earning call this morning, causing it to change its most recent quarterly accounts by $5 billion. The discrepancy comes from the British software company Autonomy, which HP purchased for $11.1 billion last August.
HP CEO Meg Whitman said that Autonomy misrepresented its value, and according to its earnings statement, HP had discovered “serious accounting improprieties, disclosure failures and outright misrepresentation at Autonomy Corporation plc that occurred prior” to the takeover.
Léo Apotheker was the CEO of the company at the time of the acquisition, and the move was widely criticized. Apotheker resigned in September 2011, to be replaced by Whitman.
The devaluation lowered HP’s assets by $8.8 billion.
Whitman said that the company hired Deloitte to audit Autonomy’s finances, and KPMG to audit Deloitte’s work; neither firm caught the discrepancies. HP said it was notified of the misrepresentation after a senior Autonomy employee came forward.
The former management team of Autonomy rejected the allegations.
“It took 10 years to build Autonomy’s industry-leading technology,” the group said, “and it is sad to see how it has been mismanaged since its acquisition by H.P.”
The Autonomy acquisition was part of a strategy to move H.P. away from computer manufacturing, where it had been suffering, and to grow its software division.