The OEM is planning to try and settle with Deloitte over its role as Autonomy’s auditor during the period in which HP alleges accounts manipulation.
The Guardian reported on HP’s announcement that it is “in talks to reach [a] legal settlement” with accounting firm Deloitte, auditor at Autonomy during a period in which the OEM has alleged it manipulated its accounts.
The Recycler reported yesterday on the new legal battle between HP and CEO of Autonomy Mike Lynch, alongside former Finance Director Sushovan Hussain. The OEM acquired Autonomy in 2011, but wrote down its worth in November 2012, claiming that “accounting fraud and inflated financials” from Autonomy officials, including Lynch, were to blame, and HP’s shareholders sued HP for mismanagement, though a settlement was announced in June 2014 and secured in March this year.
The UK Serious Fraud Office closed its investigation into the circumstances of the acquisition in January this year, but HP has now filed a claim for $5.1 billion (€4.7 billion) in damages at the UK High Court in the chancery division against Lynch and Hussain, marking the “first time the company has taken direct action against Lynch and Hussain”. The OEM stated that the lawsuit “seeks damages from [Lynch and Hussain] of approximately $5.1 billion. HP will not comment further until the proceedings have been served on the defendants”.
The OEM began a case against Deloitte late in 2014, but has now revealed that it is in talks with the company over a “legal settlement”. The case had been initiated in “pre-action letters setting out detailed claims” against Deloitte, but “it is understood that the two parties are now in talks to agree a settlement before the case reaches court”. This was confirmed by a spokeswoman for HP, who stated that it was “engaged in a pre-action process” with the financial firm.
The agreement would preserve the OEM’s right to take action in court “long after the normal statute of limitations expires”, having stated in 2014 that it would “hold the former executives of Autonomy as well as Autonomy’s auditor […] responsible for the wrongdoing that occurred”. Deloitte had responded to being sued last year by stating that “any possible claim would be utterly without merit. Deloitte UK conducted its audit work in full compliance with regulation and professional standards”.