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Hewlett-Packard has a message for Autonomy co-founder and CEO Mike Lynch: prepare to answer accounting issues related to HP's $11.1 billion purchase of Autonomy in the legal arena under the "penalty of perjury."
"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," HP said in a prepared statement responding to Lynch's call for more details on HP's claims of accounting improprieties at Autonomy. "In that setting we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under the penalty of perjury."
HP's response came after Lynch, who HP allegedly fired last May in the wake of disappointing Autonomy software sales, issued an open letter to the HP board of directors demanding that HP release specific details regarding the alleged accounting improprieties at Autonomy.
HP last week stunned investors and partners when it took an $8.8 billion impairment charge related to Autonomy including $5 billion "linked to serious accounting improprieties, misrepresentation and disclosure failures" discovered by an internal investigation by HP and forensic review into Autonomy's accounting practices."
HP said the balance of the impairment charge is linked to the recent trading value of HP stock "and headwinds against anticipated synergies and marketplace performance."
Lynch, for his part, wants to settle the matter with HP in a public forum. "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," he stated in an open letter to HP's board of directors. "HP should provide me with the interim report and any other documents which you say you have provided to the SEC [Securities and Exchange Commission] and the [U.K.'s] SFO [Securities 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."