'Everywhere I look ... it's bad': HP claims email shows Autonomy CFO panic, pre-buyout In the latest court filing in HP's rancorous legal squabble with former Autonomy execs, the tech giant has revealed what it describes as a damning email from ex-Autonomy CFO Sushovan Hussain, prompting a spokesperson for the latter to again accuse HP of "smear tactics." HP is seeking to settle a lawsuit brought by its own …
But it is not HP vs Autonomy that is driving this. It is HP shareholders complaining that they lost money through HP's purchase and HP management defending themselves by passing the buck.
I am not sure where I stand on shareholders suing the company for a drop in share price, since that is the risk you take owning shares, but since a number of execs of both companies did very well out of the merger while shareholders suffered some kind of review is needed and it looks like the HP board are too conflicted.
If this was the clear-cut fraud that HP are claiming then you'd think they'd just get on with it and bring their threatened suits to trial. What we actually see is name-calling, unsubstantiated claims, and a laser focus on covering their own execs' arses.
That bit about "...weigh the evidence against HP's officers to determine whether the condition of the settlement that would indemnify them against charges of wrongdoing would be fair for shareholders" says a lot in my mind.
As you say, if they are so damn sure of fraud why no action before any shareholder settlement? Get the facts out in court and then deal with it.
If this was the clear-cut fraud that HP are claiming then you'd think they'd just get on with it and bring their threatened suits to trial. What we actually see is name-calling, unsubstantiated claims, and a laser focus on covering their own execs' arses.
I would be inclined to agree, but it's covering more than HP exec's posteriors: we're also talking about the rear ends of the auditors involved.
The response goes on to state that Autonomy was completely open with its auditors – the UK unit of Deloitte & Touche – and notes that Deloitte stands behind its own work in the merger.
If there really was a problem of the size HP alleges, even the most inept auditors would have picked up some signals of that in their review. The fact that they have not suggests that either they didn't do their job or that HP chose to ignore any warning signs reported.
I find it interesting that HP is going after Autonomy instead of G&T, sorry, D&T. If such data only emerged later, D&T didn't do their job properly and would thus face questions, not just about this specific job but also about their diligence in anything else they have touched since. The whole idea of an auditor is that an independent 3rd party confirms accounts - if they cannot be trusted to do their job properly then the whole concept of an independent audit becomes pointless. I suspect this is where the SFO will lift up the drains first.
What is significant is that HP is playing this through the press. I read that as a hint they're not too confident in their case and worry about reputation risk. I cannot really see them have a case against Autonomy, even if there was a stink hiding - that's what auditors are for in the due diligence process.
Not being an auditor, I wonder how D&T has managed to stay out of this.
I am not sure if the playground kids are shouting about the other kid or if they are alleging the other kid's parents do not bath or something, 'look we need to buy more soap' scrawled on a shopping list does not mean they have not bathed for a week. This carefully scripted public show is doing nothing for clarity or to establish what issues matter. However it is doing everything to make me think that the case is legless without careful manipulation of a heap of 'who knows what was being talked about mails'.
Could this be the script for a low to no budget TV show well off prime time?
The rot started setting in at HP when they got rid of their quality business divisions like bio and electronic instrumentation (now Agilent, and soon to be split again), and started concentrating on increasingly lower margin IT, particularly culminating in trying their hands in the cut throat cowboy world of IT outsourcing, particularly the purchase of EDS.
As an IT scrote, in various roles in enterprise IT, I've "worked" with both Autonomy (pre buyout) and HP/EDS in various separate roles as a client of each, and they were both as shit as each other when it came to software and IT outsourcing respectively, although the exception has been HP hardware that has been reasonably good. Both say the right words to the people that matter (golf course politics with the bean counters and self-appointed blue-sky thinkers mostly, triples all round) but there's a whole different shitstorm for the scrotes, on both sides of the fence, who have to implement and integrate. You mean you want to implement and integrate? That'll cost more.
If HP failed in Fred Goodwin proportions to cheap out on their due diligence, then they only have themselves to blame. Irrespective, for supposedly bright people, those at board level need to think more about their employer's trust and reputation, and less about something that they and their predecessor screwed up on. Relying on ambulance chasing lawyers has the same reputation (or lack of it) as taking out a payday loan. Unless you're the lawyer or the loan shark, you're going to lose.
To be honest, speaking as a scrote who's worked with them both, they deserve each other. As a bean-counter, you'll be taken for a ride, and not just around the golf course. In the meantime, my HP 8753A network analyser vintage 1983 is still working just fine, and still holds the same value it did when I bought it, thank you. And Autonomy and Big Data? Meh, keep it for the nineteenth and leave it there.
Let's not forget that the amount HP wrote down, $8.8B, was roughly $3B more than anybody else thought Autonomy was worth IN TOTAL.
Regardless of whether Autonomy was worth every penny that the market thought, or as worthless as a brick in a disk drive box*, HP was STILL incompetent, some might say negligent, in what it paid for the company.
In totally unrelated news at a completely unreliable rag, Tech Titans aren't using Wall Street bankers:
http://www.theregister.co.uk/2014/08/20/wall_street_woes_tech_companies_are_not_paying_the_bankers/
Bankers report the danger this poses to ... tech firms, who might (if not using their valuable services) overpay for acquisitions by ... who knows, 500 percent? 700 percent? And lose money -- who knows -- billions and billions of dollars!
Be warned, tech firms: always use Wall Street to guarantee that if what happens to HP happens to you--why then, they'll still have your money and it won't have been their fault.
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