Two federal watchdogs have requested from Hewlett-Packard
information about its relationship with Deutsche Bank, an issue at
the heart of the lawsuit brought by HP board member Walter Hewlett.
The lawsuit challenged the legitimacy of shareholder votes cast in
favour of HP's planned acquisition of Compaq.
HP received a subpoena last week from the US Attorney's Office for
the Southern District of New York calling for information about the
voting of Deutsche Bank and Northern Trust and their affiliates on
the Compaq acquisition, HP said on Monday. HP's statement also said
it had filed notification of the inquiries with the US Securities
and Exchange Commission (SEC).
HP has also been contacted "informally" by the SEC's San Francisco
district office, which requested that HP voluntarily hand over
documents relating to its communications with Deutsche Bank
regarding the acquisition, the company said. HP noted that it is
co-operating fully with both inquiries.
Hewlett's lawsuit, filed late last month, alleges that HP
improperly coerced a Deutsche Bank unit to vote in favour of the
acquisition by suggesting the bank would lose HP's business if it
opposed the deal.
Deutsche Bank initially voted against the acquisition, but switched
some 17 million votes on the morning of HP's special shareholders'
meeting regarding the acquisition, according to Hewlett.
While the official outcome of the vote remains in doubt pending
analysis and certification of the ballot tally by voting services
specialist IVS Associates, HP maintains it has won by a "slim but
sufficient" margin.
Northern Trust became involved in the controversy surrounding the
vote when a voicemail sent from HP chairman and chief executive
officer Carly Fiorina to HP chief financial officer Robert Wayman
was leaked last week. In the message, Fiorina suggested HP "may
have to do something extraordinary" to win support from Northern
Trust and Deutsche Bank.
Hewlett's lawsuit is scheduled to begin trial later this month. HP
said that it remains "optimistic" it can close the Compaq
acquisition on its existing schedule. In late March, HP said it
would relaunch as a merged company within the next two months.