Sign in / up

back to article Ex-Autonomy exec agrees to be a witness for HP fraud case

A former Autonomy exec has entered into a deferred agreement with US prosecutors over charges that he and others deceived investors about the company's ill-fated $11bn (£9bn) acquisition by Hewlett-Packard. Christopher Egan, former CEO and head of sales for Autonomy in the US, agreed to become a cooperating witness in the …

COMMENTS

Post your comment
House rules Send corrections
Add to 'My topics' unstar *
  1. Jay 2

    Buyer's remorse

    Translation: We had sod all before, but we've managed to coerce someone to allegedly spill some beans by using the stick of a million years prison time and the carrot of non-prosecution for something (which we can change our minds on later).

    I'm sure it'll all come down to some sort of stitch up, all because HP had no idea what the hell they were buying.

    17 2 Reply
    1. Mark 110
      Reply Icon

      Re: Buyer's remorse

      Agree. HP had no clue what they were doing. Idiots.

      Though I do think Autonomy are probably guilty of massaging their figures thats absolutley no excuse for HP not doing proper diligence.

      8 0 Reply
    2. Lars Silver badge
      Reply Icon
      Coat

      Re: Buyer's remorse

      Buying companies is risky stuff. I remember a software company I later worked for who bought a smaller company, a good one, but most of the people walked out for, I assume, different reasons. So that all they actually bought was some rather empty offices and all the obligations that company had. Hardly what they expected to end up with.

      I would not surprise me if some makeup was applied to Autonomy however.

      4 0 Reply
    3. Delusional
      Reply Icon

      Re: Buyer's remorse

      I'm not clear how that answers whether someone broke any laws?

      0 0 Reply
  2. BebopWeBop

    It seemed like a good idea at the time - a constant whine by HP Execs about sooooo many acquisitions, later dumped.

    2 0 Reply
    1. Delusional
      Reply Icon

      I'm not clear how that answers whether someone broke any laws?

      0 0 Reply
  3. deconstructionist

    mental

    so it is like a bank robber being caught , gets fined less than 1000th of the haul then gets a deal to avoid jail by saying yes I was a baddie .........? we are all f**king stupid not just the fools duped dropping billions for lemon with no wheels

    1 7 Reply
    1. James 51
      Reply Icon
      Megaphone

      Re: mental

      No, this is a bunch of HP execs trying to keep a hold of their positon and bonuses by trying to say someone else lied and cheated, they aren't in any way incompetent, oh no. This is the prisoner’s dilemma without knowing if anyone did anything wrong. If you can avoid the possibility of doing jail time and a massive fine by throwing someone else under the bus, what do you do? Person looking has whatever the circumstances are, has decided that someone else should be under that bus. I understand why plea deal are necessary but this person now has a massive incentive to lie to please their new masters.

      12 1 Reply
  4. Anonymous Coward
    Anonymous Coward

    *shrug* This is how the US justice system works, plea bargains are much simpler than looking for actual evidence. They also give a much higher clear up rate (provided you don't worry about the right people being convicted) which is good for bonuses and those law officers subject to re-election.

    7 1 Reply
  5. Jonathon Green

    Don’t know what everybody’s so jumpy about...

    ...all they have to do is wait for the last HP executive to finally notice that he (or she) is the last employee on the books (which won’t be very long at the current rate), duly make themselves redundant in the interests of maximising shareholder value, and the lawsuits will all go away.

    6 1 Reply
    1. Delusional
      Reply Icon

      Re: Don’t know what everybody’s so jumpy about...

      I'm not clear how that answers whether someone broke any laws?

      0 0 Reply
  6. GcdJ

    But the alledged dodgy accounting only bring forward sals 1 quarter

    The dodgy accounting that has been listed (see here http://fortune.com/2016/12/14/hewlett-packard-autonomy/) serves only to bring sales forward 1 quarter. That is bringing a sale into Q1 that should be in Q2 serves to inflate Q1, but simultaneously deflates Q2. There is no net effect over a year (except when going from Q4 to Q1.

    It is not clear what the annual growth rate of Autonomy was is but if we are optimistic and assume 20% then bringing the whole of 1 quarter forward will at the very best makes the company appear 5% more larger or more valuable than it should. But a 5% error in company size that not generate a £8.8bn write-off from $11.1 bn purchase price.

    There has to be something else happening here.

    4 0 Reply
    1. Delusional
      Reply Icon

      Re: But the alledged dodgy accounting only bring forward sals 1 quarter

      You clearly haven't read the article..... go read <<One fact really stands out: in each of the 10 quarters preceding the acquisition, Autonomy’s revenues were within 4% of analyst expectations. That’s a level of precision that should arouse suspicion. In hindsight, achieving revenue targets like clockwork looks awfully strange. Here’s how they did it.>>

      0 0 Reply
      1. MK11
        Reply Icon

        Re: But the alledged dodgy accounting only bring forward sals 1 quarter

        I'm struggling to see your point. Either;

        a) Autonomy were very good at forecasting (or the Analysts were)

        b) HP/KPMG should have spotted something that stood out like a sore thumb

        Whatever the cause, how do you answer the original question. Allegedly moving sales from one quarter to the previous to meet sales expectations can not explain the $11b write off. There could have been at most one month sales forward booked to inflate the revenue, otherwise, there would have been a massive hole in the Balance Sheet which KPMG should have spotted during their due diligence.

        I predict the US courts finding Hussain "guilty" of recognising sales under UK GAAP that were not recognised under US GAAP and so were "obviously wrong" despite the fact that Autonomy was a UK company and despite the fact that documents show HP were fully aware.

        HP will then make a song and dance about how they were "right" all along and it was nothing to do with their mismanagement and the whole problem of why they massively overpaid will be swept under the carpet

        0 0 Reply
        1. David 164
          Reply Icon

          Re: But the alledged dodgy accounting only bring forward sals 1 quarter

          Thing is that they will lose the British case at the high court and will have to pay out hundreds of millions to Lynch, if your theory is right.

          Still that 8 billion it can use to reduce it taxes, so it no all bad for HP.

          0 0 Reply

POST COMMENT House rules

Not a member of The Register? Create a new account here.

Forgotten password ?

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like