HP accuses UK firm over $8.8bn hit

Hewlett-Packard took an US$8.8bn hit today as it accused former staff at a UK software company it bought last year of accounting irregularities.

HP acquired Cambridge-based Autonomy in a £7.1bn (€8.8bn) deal that saw its founder Dr Mike Lynch pocket around £500m (€622.5m).

The American firm alleges that former members of Autonomy’s management fiddled accounts in a bid to “mislead investors and potential buyers” and has referred the matter to the Serious Fraud Office (SFO).

HP wrote off $8.8bn (€6.8bn) in its fourth quarter earnings, with the majority linked to “serious accounting improprieties, misrepresentation and disclosure failures” discovered by an internal investigation.

The inquiry, run by accountancy firm PwC, was launched after a whistle-blower at Autonomy approached HP with the allegations.