Autonomy Founder Mike Lynch has said that the OEM was aware of practices at Autonomy, including its hardware sales and inflated growth rates, prior to acquiring the firm.
Lynch said that contentious issues were raised in a due diligence report by KPMG, including the hardware sales and what was recognised as revenue in deals with resellers, with information about the difference between European and US accounting standards in approximating growth rates. The report was made public after US shareholders pursued action against HP over the deal.
The OEM is suing Lynch, along with former Autonomy Finance Director Sushovan Hussain, for their allegedly fraudulent management of Autonomy. Lynch told Reuters: “The KPMG report directly contradicts the statements HP made about Autonomy on which its whole case is based. HP said it did not know things that it plainly did.”
HP repeated its allegation that for more than two years prior to its acquisition of Autonomy, Lynch and Hussain had conducted “a systematic and sustained scheme to make Autonomy look like a rapidly growing, pure software company whose performance was consistently in line with market expectations”, which the OEM said “was a lie”.