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August 13, 2014

Ex-Autonomy CFO says fraud claims are HP cover-up

Sushovan Hussain says HP is trying to pass the buck for "disastrous" deal.

By Joe Curtis

Autonomy’s former CFO has responded to HP’s accusations of fraud by claiming the tech giant is using the allegations as a way to cover up its own mismanaged deals.

Hewlett-Packard called Sushovan Hussain "one of the chief architects of the massive fraud" that it claims led it to pay many times the real value of British software firm Autonomy back in 2010.

Its write down of £5.15bn of the £6.5bn acquisition the following year prompted government investigations and litigation froms its own shareholders.

HP has now reached an agreement with shareholders to drop their claims against company employees, subject to court approval.

If it is passed, HP and its shareholders will join forces to chase Autonomy execs – who protest their innocence. One of those is Hussain.

Last week HP claimed: "Hussain was one of the chief architects of the massive fraud on HP that precipitated this litigation."

But the former financial director responded with his own filing this week, saying: "HP mismanaged the Autonomy merger, then shifted blame for the resulting write-down by characterising accounting disputes as ‘fraud’."

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He cited a Bloomberg report from November 2012 that said HP had "grossly overpaid" for Autonomy, as well as a former chief accountant at US financial regulator, the Securities and Exchange Commission, who called HP’s deal-making a disaster.

Hussain then said: "This corrupt settlement is part of a larger effort by HP to cover up both its mismanagement of the Autonomy integration and its ploy to falsely accuse others. By his motion, Mr. Hussain seeks to shine a light on what HP wants to keep in the dark."

HP intends to sue Hussain in England, and a spokesperson rejected his filing as "preposterous".

"The bottom line is that Sushovan Hussain’s interests and those of HP and our shareholders are diametrically opposed," they said.

"It’s preposterous for him to complain about HP and our shareholders joining forces and holding him accountable for the massive fraud that both believe he perpetrated upon the company. If Hussain is truly interested in clearing his name, he should welcome the coming suit."

A statement from ex-Autonomy CEO Mike Lynch said: "Evidence has shown the accusations HP made in November 2012 are wrong. Was this negligence or was it worse? It’s time for Meg Whitman to answer."

A Northern California court will pass judgement on HP’s shareholder settlement on August 25.

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