UK regulators launch probe of Autonomy’s accounts

Nathan Andrada – Fourth Estate Cooperative Contributor

London, England, United Kingdom (4E) – UK financial authorities on Monday have opened an investigation into Autonomy’s published accounts over the allegations that it made financial misrepresentations ahead of the 2011 deal that sold the company to Hewlett-Packard for about $11bn.

The Financial Reporting Council (FRC), the agency that crafts UK standards for accounting and auditing, said it was launching a probe with consultation with the Institute of Chartered Accountants in England and Wales.

Last year, HP wrote down Autonomy’s value by $8.8bn after it had unveiled “serious accounting improprieties” and “outright misrepresentations” with its financial records prior to buying the company.

Former Autonomy chief executive Mike Lynch has denied the allegations, saying that HP mismanaged his former company since it took over. He left HP in early 2012.

Deloitte LLP, the accountancy firm that audited Autonomy’s accounts before the deal was finalized, said they will fully cooperate with FRC investigators, according to a spokesman of the firm on Monday.

The investigation on Autonomy’s accounts marks the first time the FRC will launch such an inquiry under new disciplinary rules implemented late last year.

The FRC investigation comes as the U.S. Department of Justice investigates the improprieties allegedly made by Autonomy, according to HP. The tech giant also said it has given information to the Serious Fraud Office in the UK and the Securities and Exchange Commission in the U.S.

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