Hewlett-Packard investigators say UK firm Autonomy, acquired for $11.7bn in 2011, made 80% less profits and 54% less revenue than originally stated.
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The investigation was ordered after a whistleblower said false accounting had been used to misrepresent the value of the business ahead of the acquisition.
In November 2012, HP wrote down the value of Autonomy by $8.8bn and referred the implicated managers to the US Securities and Exchange Commission (SEC) and the UK Serious Fraud Office.
The writedown contributed to a $6.9bn quarterly loss and led to accusations by Autonomy founder Mike Lynch that he and his management team were being made "scapegoats for HP's own failings".
But accounts to be published this week will show HP drastically revised the 2010 performance of Autonomy Systems and its holding company Autonomy Corporation, reports the Guardian.
HP said in a statement: "These restatements, and the reasons for them, are consistent with HP's previous disclosures regarding accounting improprieties in Autonomy's pre-acquisition financials."
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"The substantial work necessary to prepare these accounts has revealed extensive accounting errors and misrepresentations in the previously issued 2010 audited financial statements, including the exact problems previously identified by HP,” the company said.
According to HP, the findings have a “substantial impact” on Autonomy's overall performance in the year before it was sold because Autonomy Systems made up a third of the $870m revenues in 2010.
Profit at Autonomy Systems has been revised down from £106m to £20m and revenue down from £176m to £81m.
The 2010 loss at the holding company Autonomy Corporation has been revised up from £12m to £22m.
But a spokesman for the former Autonomy managers and Lynch, who has consistently claimed HP's allegations are false, said HP’s auditor Ernst & Young has not signed off on the restated accounts.
According to the Guardian, in the soon-to-be published Companies House filing, to be published by Autonomy Systems, Ernst & Young, states: "We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.”
The former Autonomy management team released a statement saying: "We continue to reject these allegations by HP.
“Given the size of HP's writedown, we are very surprised by the small size of the adjustments in Autonomy Systems that are attributed to the ongoing accounting dispute, which represent a few per cent of group revenue. We know even these include revenue that will be recognised at a later time, under HP's new approach,” the statement said.
In December 2012, HP confirmed the US Department of Justice had opened an investigation into the allegations surrounding accounting fraud at Autonomy.