HP quizzed over Deutsche Bank vote

Two federal watchdogs have requested from Hewlett-Packard information about its relationship with Deutsche Bank, an issue at the...

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.

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