back to article Get this: Mad King Leo wanted HP to slurp two other firms alongside ill-fated Autonomy buyout

One-time bungling HP chief exec Leo Apotheker seriously considered slurping two software giants in addition to the disastrous buy of Autonomy – but was talked out of it by HP's then-CFO Cathie Lesjak. Lesjak appeared at the High Court in London this week to give evidence at HPE's $5bn fraud trial against former Autonomy CEO …

  1. Anonymous Coward
    Anonymous Coward

    Thumbs up for Lesjak then..

    Itr appears she was the adult in the room, and thus had to be sidelined.

    She asked the question then that still need answering: WTF? I get that Autonomy may not have 100% clean hands either but sorry, if you're going to hand over so much company dosh for a company I would make damn sure ALL of the financials stacked up, not just in what you bought but also market cap and valuation.

    She actually did her job.

    1. devTrail

      Re: Thumbs up for Lesjak then..

      I wouldn't judge just on a one sided description of the events given during a trial.

      1. Anonymous Coward
        Anonymous Coward

        Re: Thumbs up for Lesjak then..

        "I wouldn't judge just on a one sided description of the events given during a trial."

        But these are HP's witnesses - they're the ones that should be demonstrating the care and attention they paid to this acquisition before being fooled by Autonomy's accounting practices.

        At the moment, I'm expecting HP's case to consist of Lynch browsing through a tropical island catalogue, saying "I can pick up a nice one for $11.7bn Leo, let's use that as the price for Autonomy".

        While I'm being sarcastic, all of HP's testimony so far seems to indicate Leo and the board either fooled themselves about the price and need for urgency or they ignored dissenting views. HP then failed to do any reasonable level of due diligence and HP are playing the fraud that has been discovered as their get out of jail free card.

        1. Rich 10

          Re: Thumbs up for Lesjak then..

          Seems like there are so many CEO's that are willing to do just about anything, dare anything, so that the can have that "trophy" impact on their businesses - even when that trophy turns out to be a mounted albatross.

          1. gbshore

            Re: Thumbs up for Lesjak then..

            ...... or perhaps the strategy was to pivot away from a low margin, commodity based hardware business... Now, if you want to talk about execution, that is another thing. I have issue with thisnportrayal of Leo as some kind of humbling idiot... he was an accomplished Exec before he went to HP. His vision and strategy was not allowed to proceed so we will never know. I can tell you all as a former HP employee, Meg was NOT a great Exec at all. She had no strategy... we were constantly pivoting... my customers constantly asked me what the vision of the company was.... we would explain it... then Meg would change direction every 6 months. Her focus was on stock price PERIOD... she was bar far IMHO , far worse than Leo...

        2. GrapeBunch

          Re: Thumbs up for Lesjak then..

          But these are HP's witnesses

          Does the defence need to call witnesses? When the offence scores an own goal, it is not necessary for the beneficiary to prance about flexing their knee joints.

          But yes, please call witnesses, Messrs. Lynch and Hussain. I continue to find this circus profoundly entertaining. Biggest regret: need to buy more popcorn.

      2. The First Dave

        Re: Thumbs up for Lesjak then..

        A 'thumbs up' here is hardly intended to be a final judicial review; and clearly only applies to this one individual not to the whole trial, hence the daily updates from El Reg

      3. Michael Wojcik Silver badge

        Re: Thumbs up for Lesjak then..

        I wouldn't judge just on a one sided description of the events given during a trial

        How is it "one sided"? We've heard from a number of witnesses, who have expressed quite a range of positions.

    2. I ain't Spartacus Gold badge

      Re: Thumbs up for Lesjak then..

      Well she did her job in the sense of quietly objecting. But as the CFO I'd say that it was her duty to resign, if she thought the deal was that bad. And it sounds like there were a couple of people on the board who objected, but they failed to force the rest of the board to wait on the decision - and the non-exec members of the board failed to hold the board to account as they should have done, in the case of a major disagreement between CEO and CFO. That's supposed to be the chairman's bloody job! It's why having companies with a joint Chairman/CEO role is such a bad idea.

      So I'd say it's 3 out of 10 for her, and none for the rest of the board.

    3. tip pc Silver badge

      Re: Thumbs up for Lesjak then..

      Was it not Lesjak’s job to do the due diligence and discover the alleged accountancy discrepancy before the HP board agreed to hand over the cheque? It was absolutely her job to make noises if things where not right, after all her role was to ensure share holder value and that was definitely under risk. Should she not be accountable too for this debacle.

      1. Michael Wojcik Silver badge

        Re: Thumbs up for Lesjak then..

        Was it not Lesjak’s job to do the due diligence

        No. It was the job of the auditors, and Leo fired them before they could submit their final report. And he's already admitted he didn't read the preliminary report.

        It was absolutely her job to make noises if things where not right

        And she did so.

    4. Mark 85 Silver badge

      Re: Thumbs up for Lesjak then..

      but sorry, if you're going to hand over so much company dosh for a company I would make damn sure ALL of the financials stacked up, not just in what you bought but also market cap and valuation.

      I would think that too many companies are like HP... penny wise and pound foolish. They should put as much (if not more effort) into the high dollar acquisitions than what they put into buy bog paper and stationary. Yet, they don't.

      I do agree... she did her job. The other half of HP apparently respected her position since they kept her on.

    5. EveryTime

      Re: Thumbs up for Lesjak then..

      Hmm, it may be that she doesn't look bad, compared to the others in HP's management or board. But that's grading on a skewed curve.

      It's worth noting that she apparently didn't figure out the cooked books, had only decided at the last hour to say something to the board, didn't have documentation to back it up, and said only enough to CYA.

  2. Moosh

    So the angle of attack is to show just how incompetent and toxic the HP environment was, then argue that this was why they lost so much money with autonomy, rather than it being a result of any wrongdoing on Mike Lynch's part?

    From following the trial via The Reg, it seems like its working.

    1. hammarbtyp

      I think the angle of attack is that rather than the value of Autonomy being overpriced based on dodgy accounting practices from Lynch and co, it was due to HP's dysfunctional company culture and a desire to move into a high margin area, whatever the cost. Interestingly it appears that HP thought they were in a bidding war with Oracle. True or not, such things tend to push the price up and it must be remembered that it wasn't unusual at the time for so called Web 2.0 companies to be bought with stupid money, despite having no visible assets.

      How much Autonomy is to blame in this is still to be decided, but if someone comes to you and offers 10 times the value of your house, are you going to ask questions? It is the equivalent of HP doing this then finding the expected gold seam they had expected in your garden was not there and therefore blame you for not putting it there

      It also feels that there was open warfare at the top, and as with any such conflict, those involved on the losing side will try and rewrite history to put themselves in a better light.

      Whatever happens, HP does not come out looking good in all this

      1. Aristotles slow and dimwitted horse Silver badge

        Kind of...

        I think it's kind of this : "it is the equivalent of HP doing this then finding the expected gold seam they had expected in your garden was not there and therefore blame you for not putting it there"

        But... and I'm not calling any impropriety here either way. Isn't the crux of it as to whether Autonomy had advertised the garden as having a gold seam, but it not actually being there? That would be fraud perhaps? IANAL, so I'm not sure where UK law stands on this if I were to buy a house advertised as having a garage, but it not actually being there when I exchange contracts? What would be my legal recourse if I only found out it had no garage once I took legal ownership? Either way, this being the main reason we all pay lawyers to due diligence when we buy a house yes?

        So, the key question for me here is : did Autonomy fraudulently pump up their revenues to look more attractive, so as to be bought by HP. And does the fact that HP bungled the due diligence actually matter?

        I dunno to be honest; this is why I'm finding this case absolutely riveting...

        1. Peter2 Silver badge

          Re: Kind of...

          IANAL, so I'm not sure where UK law stands on this if I were to buy a house advertised as having a garage, but it not actually being there when I exchange contracts? What would be my legal recourse if I only found out it had no garage once I took legal ownership? Either way, this being the main reason we all pay lawyers to due diligence when we buy a house yes?

          If you buy a house that you think has a garage, but you fail to check this then there is a specific legal concept to describe this problem that's so old that it's actually in Latin which is "Caveat Emptor", which loosely translated into English means "let the buyer beware". In other words, if you don't check then it's your problem.

          You pay a conveyancer money when you buy a house to do the conveyancing, ie; make you aware of wider issues that are not likely to be apparent just by taking a glance at the property such as that your ideallic cottage in the middle of nowhere with a premium price has had all of the land next door sold to a developer who has planning permission for 2500 houses.

          Your Solicitor would certainly highlight the package of land that you are buying on a Land Registry map, however they don't visit the property, and absent of you communicating that you expected there to be a garage they don't check for the presence of outbuildings etc. The suitability of the building for the purposes that you are purchasing it for are entirely your problem; if you don't notice that a building is missing a garage when you expected one to be present then it's your problem, even if that was part of the advertising. Your not buying the advertising; your buying the property as it stands at the point of exchange of contracts.

        2. Commswonk Silver badge

          Re: Kind of...

          @ Aristotles slow and dimwitted horse: IANAL, so I'm not sure where UK law stands on this if I were to buy a house advertised as having a garage, but it not actually being there when I exchange contracts? What would be my legal recourse if I only found out it had no garage once I took legal ownership?

          Learned Counsel: Are you telling this Court that when you became the legal owner of this property there was no garage, despite one being specifically mentioned in the sales brochure given to you by the estate agent?

          You: That is correct.

          Learned Counsel: And a garage was clearly present when you inspected the property with a view to its subsequent purchase?

          You: I did not inspect the property prior to purchasing it.

          Learned Counsel: And did the surveyor you employed comment on the existence or otherwise of a garage when they inspected the property on your behalf?

          You: I didn't bother to read the surveyor's report.

          Learned Counsel: Ahhh...

          (Laughter)

          Mr Justice Cocklecarrot: (For it is he) Silence!!

          With acknowledgements to "Beachcomber".

      2. tip pc Silver badge

        Like buying a house in 2007 for a premium then selling in 2008 for a huge loss & asking the previous seller for the difference back.

    2. I ain't Spartacus Gold badge

      I think the defence is that Autonomy was doing great when HP bought it, but they then ran it so badly that sales collapsed, and everyone left.

      From reading El Reg's summaries that seems to be doing quite well. Also we've had barely any evidence of the supposed fraud of all these hardware sales to boost turnover. Which surely isn't fraud anyway, if a company reports its sales and profits accurately? It's just if HP weren't checking when they did their due dilligence and didn't notice that not all the sales were highly profitable software.

      There'll be a whole bunch of written evidence, that if it comes from the accounts both sides will agree, and so therefore will get less discussion in court - but obviously the judges will have in front of them.

      But of course we haven't heard the testimony and cross examination of defence witnesses yet - so I suppose it's possible that they'll sound even more dodgy and incompetent than the HP ones? Hard to imagine, but possible...

      1. Anonymous Coward
        Anonymous Coward

        "I think the defence is that Autonomy was doing great when HP bought it, but they then ran it so badly that sales collapsed, and everyone left."

        We've only had HP telling/defending their side of the argument at present - HP will get their chance to attack Lynch/Autonomy when those witnesses are on the stand.

        As an aside, I don't think any of the HP witnesses have tied Lynch directly to the fraud other than via his position as CEO. Tehre's no e-mail/recollection of conversations etc - happy to be corrected

        1. John Brown (no body) Silver badge

          "We've only had HP telling/defending their side of the argument at present - HP will get their chance to attack Lynch/Autonomy when those witnesses are on the stand."

          Wait...what? This is HPs own witnesses for the prosecution? I'm not sure there'll even be a need for a defence after this "attack".

    3. LDS Silver badge

      'argue that this was why they lost so much money'

      Dangerous tactic - if you set up a fraud, the fact that you deceive a moron may not help you much.

      The fact that some people at HP had deep doubts about Autonomy real value, may also mean that Autonomy tried to look better than it was.

      1. wabbit02

        Re: 'argue that this was why they lost so much money'

        The fact that she makes no comments about Due diligence or the disputed Hardware sales (in this article) just the premium seems to say either she wasnt involved (as CFO I find that hard to belive) or that she is staying well away (Leo did it all).

        1. Nick Kew Bronze badge

          Re: 'argue that this was why they lost so much money'

          The fact that she makes no comments about Due diligence or the disputed Hardware sales (in this article)

          Means nothing more than that those were not the focus of the questioning: the court wants to hear from primary sources. Unless she was personally involved in Autonomy's sales, any knowledge she might have would be hearsay and thus irrelevant to the court. Likewise her role in due diligence will have been limited to assessing reports prepared by those directly involved (I guess Autonomy and their auditors and whatever agents HP appointed), and her assessment seems to have balked at the price.

        2. Michael Wojcik Silver badge

          Re: 'argue that this was why they lost so much money'

          Due diligence from the CFO would consist primarily of evaluating the report from the auditors. Leo fired them and closed the deal before that report was complete. He prevented Lesjak from doing her job.

          As it was, she argued against the purchase at that price, and presented reasons for not going through with it.

      2. aks Bronze badge

        Re: 'argue that this was why they lost so much money'

        You always make yourself pretty for the date. Due diligence would discover the false wig, heavy makeup and glass eye.

        After the marriage, HP seem to have removed the false wig (hardware sales) and are complaining that you're not the girl I thought you were.

  3. Flak
    FAIL

    HP only has itself to blame

    It appears that HP only has itself to blame - hearing what it wants to hear, dismissing warning voices and proceeding with an overpriced acquisition despite the fact that people within the organisation knew better.

    Clearly the Autonomy guys knew they had won a watch (more like a large pot of gold).

    Looks like this lawsuit will not vindicate the HP leadership at that time - I feel for the HP shareholders who bore the brunt of this massive value destruction.

  4. Doctor Syntax Silver badge

    "simply one person's opinion"

    The one person who happens to be the CFO, the person whose opinion should count.

    1. rdhood

      "simply one person's opinion"

      The one person who happens to be the CFO, the person whose opinion should count

      ..... and with plenty of supporting evidence and testimony and (ultimately) 20/20 hindsight seemingly supporting every single thing that she said, without a whole lot of other testimony that casts any doubt on her opinion....

  5. m0rt

    HP Killed WebOS. I can never forgive them for that.

    This makes me sad, that the company behind the HP-35 has become this weird, Netflix drama of a company.

    1. Aladdin Sane Silver badge

      I wonder what the rights are worth?

    2. bpfh Silver badge
      WTF?

      This.

      WebOS phones were not widely known, but had a rabid fan following for those that got used to them, and HP had the power to shove Android around and possibly out with a superior offering. Then Leo happened, and WebOS was reborn as a TV operating system. I would have been nice to see it come back a bit more main line... but in the end, HP is an IT black hole, going from a great technical innovator in the past, to swallowing companies such as DEC purchased by Compaq and strangled, then itself by HP, and strangled, leaving a dried husk of the former company, and trying to surf the brand name to success.

      The run to "services" from a company who's original raison d'être was innovative hardware and reliable printing systems, hoping that decades of hardware success would instantly translate into an instant software success still seems extremely short sighted, but hey, I'm not paid millions as the all thinking all seeing CEO, I probably have no idea what i'm talking about.

      1. aks Bronze badge

        Re: This.

        I've used HP hardware for over 30 years and have always been impressed by it. Their software seems to have always been sub-par.

    3. Simon Ward

      This makes me sad, that the company behind the HP-35 has become this weird, Netflix drama of a company.

      There are those, myself included, who would say that that particular incarnation of HP died a long, long time ago.

      1. Michael Wojcik Silver badge

        Yes. Hard to argue it existed after the HPaq merger in 2002, or even the Agilent spinoff in 1999.

        Maybe earlier, though the Apollo acquisition and even the decades-long investment in the ultimately doomed EPIC architecture strike me as consistent with the old HP philosophy, successful or not.

  6. R3sistance

    So many stupids

    So thus far, we have seen that:

    a) this was pushed by a CEO that promised he wouldn't do any big company acquisitions

    b) nobody verified Autonomy's Financial records (no due diligence performed)

    c) HP brought Autonomy to instead advertise a rival's product

    d) There were big disagreements among top staff at HP

    e) HP offered a sum to beat out the 4 Billion acquisition talked about with Oracle, which Oracle had already turned down as too expensive (they had checked Autonomy out)

    f) HP requires Due Diligence on everything (except when it came to purchasing Autonomy)

    g) HP's Due Diligence was little more than filling out a form and never a form of Due Diligence

    h) the CEO was warned that Autonomy was a bad purchase, a dead man walking, a lame duck in the making.

    and the Judge hasn't tossed out HP's case, because? It really seems at this point that HP's case was that there was some abnormalities in Autonomy's Financial Records but haven't actually shown the scale of this nor how it caused them to massively over-inflate their estimate of the company's value. Every large corporation probably has a bit of abnormality within its Financial Records due to the size and amount of transactions occurring, as well as chains that can/do lead back to the company in question. It seems entirely like HP has brought a case with no real evidence at all.

    1. I ain't Spartacus Gold badge

      Re: So many stupids

      Judges don't generally toss out cases, unless there's no evidence at all. And this being a civil trial, the standard of proof is "on the balance of probabilities", not "beyond reasonable doubt".

      On the other hand, their judgements can sometimes make exremely painful reading if they find against your case, and your case happened to be a pile of poo.

    2. aks Bronze badge

      Re: So many stupids

      I assume the judge has not thrown it out is that he wants to do a professional job and prevent this being just one step in an endless round of appeals. Just be grateful this is a UK court.

    3. Anonymous Coward
      Anonymous Coward

      Re: So many stupids

      I suspect the problem is that there were indeed accounting anomalies in Autonomy. Even though they were not functional in the valuation, HP is trying to bank on that (pardon the pun) to wholly blame Autonomy for their boneheaded deal and so avoid getting into trouble with the shareholders.

      HP's problem, however, is that red flags HAD indeed been raised about the purchase by the most important person for such deals, the CFO, and she was overruled and even booted out.

      That discounts any use of Autonomy's bookkeeping anomalies as an excuse: HP's CEO was warned, took the decision anyway and is now trying to shift the blame on Autonomy who is naturally not taking this lying down. Ironically, they are probably using some of the extra cash they received to fund the counterclaims so they can't be bullied into settlement either.

      It's a fantastic and frankly mildly amusing mess for anyone not involved, with really one person responsible, and he isn't at Autonomy. The rest is noise.

    4. Jay Lenovo
      Devil

      Re: So many stupids

      "Success has many fathers, Failure is an orphan"

      Good news Failure, I think we found your father.

  7. Anonymous Coward
    Anonymous Coward

    Oracle was never serious about Autonomy

    Despite HPE's attempts to rewrite history, nobody else at the time thought Autonomy was worth anything close to what Leo paid. Oracle in particular was offered Autonomy at *half* what HPE ended up paying. They laughed and walked away.

    1. aks Bronze badge

      Re: Oracle was never serious about Autonomy

      Paying way over the market price, presumably based the myth of synergy is a guaranteed way to lose your shirt. You nearly always end up with a bloated, disfunctional company.

  8. Commswonk Silver badge

    I wonder...

    ... if HP has realised that it is paying a lot of money so that the rest of the world can watch it washing its dirty linen in public.

    It will be interesting to see where the major participants in this grisly tale are in (say) 12 months time, and also to see if HP still exists in any recognisable form.

    1. Anonymous Coward
      Anonymous Coward

      Re: I wonder...

      “. if HP has realised that it is paying a lot of money in the hope they can avoid even more expensive shareholder lawsuits that may destroy the company, while the rest of the world can watch it washing its dirty linen in public”

      FTFY

  9. devTrail

    drive the attention buffoon

    I already commented in a previous article saying that Apotheker is playing the role of the "drive the attention buffoon" and all the other articles I read here seem to confirm my suspect, all HP people insist that someone who's been there for about an year bears all the responsibility for the loss of more than 10 Billion US$.

  10. Ashentaine

    >As it was, Apotheker and the board agreed to pay a 68 per cent premium for Autonomy (on its market cap) – incidentally, Lesjak told the court Oracle had been in the frame as a potential bidder for the big data biz.

    Now I wonder if Apotheker bought Autonomy for the sole reason of keeping it out of Oracle's hands, rather than seeing it as an asset for HP. At this point I wouldn't consider such a thing out of the question.

    1. LDS Silver badge

      I think he wanted to cement his position as CEO of a big company, and looked for a deal that would achieve it, hoping to make a big splash - there was back then some hype around Autonomy, let's not forget it, about its data analytics technologies, which looked the next gold rush.

      Autonomy understood he was nowhere near the man he wanted to be, and they could sold him a bridge - and Apotheker rammed the deal through HP without a second thought. Of course he was not alone, as HP was eager to transition to something else - whatever it was. Especially those who chose him as a CEO - even if he came from SAP, he really didn't look what HP needed.

    2. Anonymous Coward
      Anonymous Coward

      Hmm, even as a strategic purchase it has to make some financial sense, and it doesn't.

      There's no way this purchase was protecting something of higher value at HP, not at that price.

    3. The Nazz Silver badge

      re 68% premium.

      Tbf, a 68% percent premium over the market cap doesn't seem to be excessive or uncommon. Many a takeover occurs with a bigger premium paid than that.

      It may well be that the market cap was much greater than it should have been, possibly due to any alleged accounting irregularities by Autonomy, more likely due to the way Wall St./The City functions.

      re the trial process, logically one would expect the court/Judge to examine the actual facts of the alleged accounting irregularities first. And if determined that any exist, to judge on whether that constitutes actual fraud. (IIRC the UK's Serious Fraud Office concluded that there wasn't sufficient evidence to obtain a prosecution. Not quite the same as no fraud at all.)

      Only then should the extent of any damage to HP be considered, and if so to what degree. So far, it looks like HP's own staff_witnesses are claiming responsibility for 99% of that.

    4. Anonymous Coward
      Anonymous Coward

      "Now I wonder if Apotheker bought Autonomy for the sole reason of keeping it out of Oracle's hands, rather than seeing it as an asset for HP. At this point I wouldn't consider such a thing out of the question."

      I'm not sure Leo had any grudges against Oracle other than being party to SAP's alleged acquisition of confidential Oracle information - I think he was trying to turn HP into a software company. Whether he was doing that the right way is a separate question.

      The rest of the HP board had started their Oracle feud when Larry called them a joke for firing Hurd. Leo's hiring may even have been because of his previous run in with Oracle.

      Then you have Larry badmouthing Itanium in early 2011 by suggesting Oracle won't port newer database releases to the platform, leading to more lawsuits. While Oracle lost the lawsuits eventually, Larry was effectively right - the 2012 Itanium was the end of architectural development in-spite of getting a 2017 die shrink.

      Autonomy was happening in the middle of this. Who suggested Oracle may bid for Autonomy? Autonomy? HP? HP's advisors? None of them?

  11. Anonymous Coward
    Anonymous Coward

    It's actually remarkable that for the past 25 years HP have managed so select one incompetent muppet after another as CEO. None of them should even be running a coffee shop.

    1. BebopWeBop Silver badge

      Well I have to disagree (a teeny weeny bit). Lew Platt (Chairman 1993–July 18, 1999) was very competent at least if you forget any influence he had in enabling Fiorina.

      Fiorina was extremely convincing at a personal level (in a way that made you check your wallet a little too late) having met her a number of times - shame on me as they say.

      As the level of incompetence went up, the remuneration seems to have increased as quickly as growth an profitability has dropped. Wall Street imperatives....

  12. Anonymous Coward
    Anonymous Coward

    How is Ray Lane escaping scrutiny?

    I worked at HP during the time this all unfolded. Leo’s hire was the most bizarre event I’ve seen in my 30+ years – which is saying something after Carly, Mark Turd etc. Leo’s hiring was met with a collective “who the hell is this” from the employee community. I doubt anyone expected he would screw up as badly as he did. I submit it’s one of the most colossal hiring failures in the industry and the HP Board is responsible. Given that failure and after seeing him in town halls – I am convinced that Ray Lane is insane. So how has he managed to avoid being dragged into this?

    Anyway – Cathie L was indeed the only grown-up in the room – I really wanted her to take over as CEO after Crazy King Leo, primarily because she didn’t want the job. What a fiasco.

  13. adam 40

    Automoney

    That's what I'm calling my next Ltd Company.

    Then I'll sell it for an inflated price to some stupid Americans and retire on the proceeds.

    This time next year Rodney....

  14. a_yank_lurker Silver badge

    Leo the Galactic Idiot

    Leo had competent advice from the one person who really knows how to count beans are read the required filings for what do and do not say. Leo ignores the advice because he has a vision of getting into the 'high margin' software business. There are a couple of points that are often overlooked. Though hardware tends to be at best a semi-commodity business with mediocre margins at best. Without hardware to use the software there are no software profits. While printers are not used as heavily as they once were, they are still used quite a bit. The problem with the hardware business is that it is now a mature market with primarily replacement sales. Commercial software is lagging behind hardware in margin erosion but erosion is occurring. Hence the rise of subscriptions used by various semi-criminal operations. But making hardware is very different than writing commercial software so the internal skills HP had at the time would only be good to throughly mangle a software operation. The Galactic Idiot was trying move HP into a market they really did not understand and away from markets they did understand.

  15. FozzyBear
    Alert

    This paragraph is the most telling.....If any of this statement is true

    "The CFO told Miles she had been shocked at the buy price agreed but played no part in the negotiations. She also said her "credibility" with Wall Street, "which is very important for a CFO", was at stake due to the inflated price tag and attempted to encourage Apotheker to "renegotiate" with Lynch and co."

    It certainly suggests HP's due diligence was sub standard or non-existent. Even a whiff of fraud or inflated sales figures, revenue, etc. should have set off red flares the size of nukes within the board room. Yet no mention of it anywhere in her testimony

    It highlights the fact that the C levels were aware that Autonomy was overpriced.

    Apotheker ignored advice from the CFO and proceeded with the purchase

    Raises the question why wasn't the CFO involved in the negotiations? Who was involved?

    The CFO was a spineless wimp. If she had concerns and worries about the deal so badly that it kept her up at night she should have presented those findings and concerns to the board . You know the ones she is ultimately responsible to.

    1. Anonymous Coward
      Anonymous Coward

      Re: This paragraph is the most telling.....If any of this statement is true

      "The CFO was a spineless wimp. If she had concerns and worries about the deal so badly that it kept her up at night she should have presented those findings and concerns to the board . You know the ones she is ultimately responsible to."

      Keep in mind that the CFO is:

      a) appearing on behalf of HP.

      b) likely has little in the way of evidence to back up particularly controversial evidence. i.e. "I told the board X times that Autonomy was overvalued and no one listened" being met with board members denying what she said risks her reputation

      c) she has retired so their is little need to rock the apple cart to justify her actions. If she did make it clear to the board and was ignored, she would risk looking petty and justify why she was ignored.

  16. Nick Kew Bronze badge
    Trollface

    Swap?

    A wicked thought occurred to me reading this ...

    How about we swap clowns? Boris to lead HP; Meg and Leo for the Tory leadership election? The candidates may not be obviously any better or worse than each other, but it takes their respective damaging Agendas out of the picture.

    I'll get me coat.

    1. Anonymous Coward
      Anonymous Coward

      Re: Swap?

      "How about we swap clowns? Boris to lead HP; Meg and Leo for the Tory leadership election?"

      And when Leo returns after having purchased all the Greek debt for £39bn as a "bargin" and Meg does nothing but attempt to prove the UK was misled for 4 years, will you still be saying "at least it wasn't Boris?"

      As for Boris, I don't think he has f*cked a company OR a country, so either option would be a new experience for him...

  17. Anonymous Coward
    Anonymous Coward

    I wonder if Ray Lane will be called?

    It would interesting to hear an HP board member in the witness box. Using the term member very ambiguously.

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