The Serious Fraud Office has launched an investigation into UK software vendor Autonomy's accounting practices, in light of the HP's accusation of "accounting improprieties, misrepresentations and disclosure failures" by the company's former executives.
"The director of the Serious Fraud Office has decided to open an investigation into [HP's] allegations, with a view to using its powers of investigation to allow them to be tested.
"It is, of course, right to point out that the opening of a criminal investigation does not mean that individuals are guilty of a crime or indeed that a crime has been committed.
SFO also said that it will make sure that the fact that it uses an Autonomy product, document management tool Introspect, poses no conflict of interest. "The SFO is keen to ensure that there is now no conflict of interest or perception of such a conflict, and it is obliged as a first step to make inquiries to ensure that it can continue as the investigating body. It is undertaking this work at present."
"The SFO will make no further comment whilst its investigation is underway."
News of the SFO's investigation was first revealed in a regulatory filing by HP yesterday. "On February 6, 2013, representatives of the UK Serious Fraud Office advised HP that they had opened an investigation relating to Autonomy," the filing said.
HP also said that it has now given the SFO, the US Department of Justice and the Securities and Exchange Commission information "related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP's acquisition".
In November last year, HP accused Autonomy's former executives of using "accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP".
It had bought the Cambridge-based information management provider for around $10.2 billion in 2011. HP subsequently wrote down the value of its software to the tune of $8.8 billion after reassessing the true value of the company.
Shortly after HP made its accusations, information management analyst Alan Pelz-Sharpe said that he had reported Autonomy to the SFO before HP's acquisition.
He and others had received a dossier of allegedly incriminating information on its accounting practices from an anonymous source, believed to be an Autonomy insider, which he passed on to the SFO.
