Response to HP’s restatement of Autonomy’s accounts
Any allegation of misrepresentation, disclosure failure, fraud or accounting impropriety against Autonomy in relation to its accounts is completely false.
The restated 2009 and 2010 figures for Autonomy companies submitted to Companies House on 31st January 2014 contain no new material information. All that they reflect are differences in accounting treatment between the policies used by Hewlett-Packard and the international accounting rules that Autonomy used as an independent company. Moreover, HP’s current auditors, Ernst & Young, have refused to give an opinion on the restated accounts, citing a lack of “appropriate audit evidence.”
A close reading of these accounts shows that the changes in Autonomy Systems sales were mainly a matter of deferred timing under the new HP accounting policies, deferring revenue out of 2010 and into future years. HP’s intimation that this revenue has in some way disappeared is false.
Worryingly, it also appears that HP’s restatement of Autonomy Systems’ accounts may have more to do with minimizing the company’s UK tax obligations, since it includes disclosure that Hewlett-Packard has asked HMRC for a £37.4m tax refund on the back of these restated results. As an independent company, Autonomy was a good corporate citizen. It always paid its proper share of UK tax and the company did not resort to any exotic accounting treatments in order to avoid paying tax.
Hewlett-Packard undertook extensive due diligence on Autonomy and its accounts before the 2011 takeover. Since then, it has consistently failed to substantiate its allegation that Autonomy in any way inflated its sales and profits. It has never provided the former Autonomy management team with any documents supporting its claims. The reason for that is simple: there was no misrepresentation of the numbers and Hewlett-Packard’s claims simply do not add up.