Mike Lynch challenged Hewlett-Packard Co.s board over charges that Autonomy falsified financial statements, but HP rejected the request, saying it has uncovered extensive evidence of improper accounting as part of an intense internal investigation.
HP said the matter is now in the hands of authorities.
By appealing directly to the board, Lynch is ratcheting up pressure on CEO Meg Whitman to show how the alleged wrongdoing justified such a big writedown. Accountants questioned whether HP used the announcement to deflect attention away from a botched acquisition, and investors said the failure to detect falsified financials earlier undermined confidence in the board and management.
Autonomys finances, during its years as a public company and including the time period in question, were handled in accordance with applicable regulations and accounting practices, Lynch wrote. I utterly reject all allegations of impropriety.
Hewlett-Packard, which employs about 3,700 people at its Boise campus, said on Nov. 20 that Autonomy managers misreported finances to make the company appear more successful than it was. Whitman was on the board when HP agreed to buy the British firm for $10.3 billion last year.
Last week, Hewlett-Packard said $5 billion of the writedown was related to accounting improprieties, including booking hardware revenue to appear as more profitable software. The company said it found $200 million in wrongly categorized or falsified sales.
In a letter sent to news organizations, Lynch asked HPs board for immediate and specific explanations of any claims, along with supporting documents.
Whitman ousted Lynch in May, citing a significant decline in license revenue at Autonomy. The divisions underperformance adds to challenges facing the Palo Alto, Calif.-based company, which is already buffeted by management turmoil and slowdowns in its PC, printer and technology-services businesses.
Lynch also asked HP to publish the calculations behind the $5 billion figure and provide him with a copy of the report it turned over to U.S. and British regulators.
Having no details beyond the limited public information provided last week, and still with no further contact from you, I am writing today to ask you, the board of HP, for immediate and specific explanations for the allegations HP is making, Lynch wrote.
Autonomy, which makes software for searching corporate libraries of information stored in various formats, had been on the block for months before agreeing to the HP deal, announced in August 2011.