Out-Law News 1 min. read

SFO closes HP Autonomy investigation


The Serious Fraud Office (SFO) has closed its investigation into alleged accounting impropriety by a UK software company ahead of its acquisition by computing giant Hewlett Packard (HP) in 2011. A US investigation is ongoing.

The SFO said there is "insufficient evidence for a realistic prospect of conviction" in relation to some of the allegations it had been investigating, and that US authorities were taking responsibility for investigating the other allegations raised in the case on jurisdictional grounds.

HP has accused Autonomy and former members of its management team of fraud. It claimed that it paid more money than it should have when it bought Autonomy in 2011 as a result of "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy". In 2012, HP wrote off $8.8 billion of the $11.1bn it paid for Autonomy, attributing $5bn of that write down to the alleged practices carried out by Autonomy prior to its acquisition.

"In respect of some aspects of the allegations, the SFO has concluded that, on the information available to it, there is insufficient evidence for a realistic prospect of conviction," the SFO said in a statement. "In respect of other aspects and on the application of well-established principles, jurisdiction over the investigation has been ceded to the US authorities whose investigation is ongoing."

The SFO said that it could not provide more detail on the reasons behind the dropping of its investigation so as not to "undermine the US-based investigation".

The US Department of Justice (DoJ) is conducting its own investigation into the allegations raised by HP, and the US Securities and Exchange Commission (SEC) and Federal Bureau of Investigation (FBI) are also thought to be running their own probes too, according to a report by the Financial Times. The Financial Reporting Council in the UK is also still investigating.

Autonomy founder and former chief executive Mike Lynch and the company's former chief finance officer Sushovan Hussain are both being pursued by HP before the US courts. HP has said both Lynch and Hussain "should be held accountable" for fraud they allege to have been the victim of.

However, Autonomy's former management team has refuted any suggestion of wrongdoing. In a statement, Lynch welcomed the SFO's decision to close its investigation.

"As we have always said, HP’s allegations are false, and we are pleased that after a two-year review of the material presented by HP, the SFO has concluded that there is not a case to pursue," Lynch said.

A spokesperson for HP said, however, that the company "remains committed to holding the architects of the Autonomy fraud accountable", according to a BBC report.

"As the SFO made clear, the US authorities are continuing their investigation and we continue to cooperate with that investigation," the spokesperson said.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.