HP ‘knew of Autonomy practices’

HEWLETT Packard knew about controversial accounting practices at Autonomy before it bought the firm, an internal document claims.

The US computing giant has accused directors of the UK firm of a £3bn cover up in the run up to HP’s £7.1bn takeover in 2011. But a due diligence report compiled by KPMG sets out accounting practices that HP subsequently claimed took it by surprise. A year after the deal completed, HP claimed that it had discovered several techniques used by Autonomy to inflate its own growth rate, including selling hardware alongside some deals and booking sales before they were completed.

But KPMG’s report, seen by the Mail, clearly identifies that these things happened at the firm and this was spelled out in the document HP had before it bought Autonomy.

Autonomy founder Dr Mike Lynch said: ‘This document, which HP tried to suppress, shows exactly what HP knew and calls into question the statements they made.

‘Did they not read this document before spending $11bn?’

There is even a suggestion that HP directors did not read the report.

In a court hearing last year, a US lawyer acting for Autonomy said ‘many’ HP directors ‘had no idea there was a KPMG report, did not know the conclusion of the report’.

No one from HP was available to comment last night.