Sushovan Hussain, the former CFO of Autonomy has responded to HP "fraud" claims, alleging mismanagement of the 2011 bungled acquisition.
Earlier this month, HP claimed Hussain was one of the chief architects of the massive fraud over the acquisition of Autonomy in 2011, which resulted in a $8.8bn write-down.
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HP claimed: "Hussain was one of the chief architects of the massive fraud on HP that precipitated this litigation.
"The notion that he should be permitted to intervene and challenge the substance of a settlement designed to protect the interests of the company he defrauded is ludicrous," HP said.
In response, Hussain's filing stated: "HP mismanaged the Autonomy merger, then shifted blame for the resulting write-down by characterising accounting disputes as 'fraud'."
HP's billion dollar write-downs
• $8 billion write-down of EDS announced in August 2012;
• $1.2 billion write-down of Compaq announced in May 2012;
• $1.67 billion write-down announced in November 2011 in connection with the failed Palm acquisition and related business closures.
Source: Sushovan Hussain court filing
Hussain's filing alleges HP paid off shareholders, who began a $1bn case against HP's board in 2013.
He also stated that the company forced out then CEO Leo Apotheker and chief strategy officer Shane Robinson, who, he said, wanted to take HP in a completely new direction.
When he was CEO, Apotheker wanted to sell the company’s market-leading PC business to fund the acquisition of Autonomy.
But Hussain stated: "They never had the chance, because they were forced out between when the deal was announced and when it closed. Lacking the enthusiasm or vision of those who initially sought the deal, HP’s integration of Autonomy failed miserably. Hoped-for synergies turned into conflicts and redundancies. Sales incentives were mismatched and unproductive. Unhappy employees fled. Apotheker’s vision for the acquisition went from dream to disaster."
He described the $8.8bn write-down as an example of one of many recent botched HP deals.
More on HP Autonomy dispute
- HP sues former Autonomy CFO
- HP set to settle with shareholders over lost Autonomy billions
- HP chairman Ray Lane steps down following shareholder attack
- Investors sue HP for $1bn over Autonomy deal
- HP knew of Autonomy hardware sales tactics
- HP investigators find Autonomy made 80% less profit than stated
- HP dumps Apotheker and hires Whitman
Hussain's filing also quoted the former chief accountant at the US SEC, who asked: “How does that [$200m adjustment] translate into a $5bn write-off? … The big issue isn’t the fraud they are talking about. The big issue is that HP has made acquisitions that have turned out to be a disaster."
He said HP paid 11 times over Autonomy's 2011 revenue. "The real story here is … that HP was the sucker."
Hussain stated that HP had only released 200 documents preventing any scrutiny of its management related to the bungled acquisition. "HP has at every turn beat back every effort at inquiry into its mismanagement surrounding the Autonomy acquisition. Despite many efforts by plaintiffs’ counsel in numerous actions, HP has successfully limited its document production concerning the Autonomy acquisition to just 200 documents produced under seal in Delaware. HP has otherwise remained immune from any discovery or inquiry about its own mismanagement of the acquisition."