Mike Lynch, the former Autonomy CEO, has ‘utterly rejected’ HP’s allegations of financial impropriety at the company in an open letter.
"Autonomy’s finances, during its years as a public company and including the time period in question, were handled in accordance with applicable regulations and accounting practices," he wrote. "Autonomy’s accounts were overseen by independent auditors Deloitte LLC, who have confirmed the application of all appropriate procedures including those dictated by the International Financial Reporting Standards used in the UK."
"Having no details beyond the limited public information provided last week, and still with no further contact from you, I am writing today to ask you, the board of HP, for immediate and specific explanations for the allegations HP is making," Lynch insisted.
"HP should provide me with the interim report and any other documents which you say you have provided to the [Securities and Exchange Commission] and the [Serious Fraud Office] so that I can answer whatever is alleged, instead of the selective disclosure of non-material information via background discussions with the media."
Lynch demands a specific breakdown the allegations against Autonomy, including that it mis-reported hardware sales as software licenses, and that it reported channel sales "where no end-user customer existed".
"Hewlett Packard is an iconic technology company, which was historically admired and respected all over the world. Autonomy joined forces with HP with real hopesfor the future and in the belief that together there was an opportunity to make HP great again.
"I have been truly saddened by the events of the past months, and am shocked and appalled by the events of the past week."
In a response to the letter, HP said it would not disclose the information outside the legal process. "While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders," it said.
"In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury."
Earlier this week, HP was hit by a class action lawsuit from investors, alleging that it failed to investigate Autonomy’s accounting irregularities before acquiring the company last year.
It also alleges that HP senior vice president James Murrin sold 132,500 HP shares for almost $3.5 million while “in the possession of materially adverse and non-public information".