Hewlett-Packard accountants sued over Autonomy purchase

Deloitte and KPMG are being sued over their alleged role in Hewlett-Packard's controversial purchase of Autonomy.

An HP shareholder says the US PC-maker paid too much for the UK software firm.
The lawsuit, filed in California on Monday, accuses the two auditors and other named defendants of failing in their duty to spot that Autonomy was not worth as much as it claimed, and then misrepresenting the deal's value.
Both firms have denied responsibility for valuing Autonomy at the time.
"Simply put, HP grossly overpaid for Autonomy," claims the legal action, which was brought by Philip Ricciardi, an HP shareholder since 2007.
Last week, HP announced that it was writing off $8.8bn of the $11.1bn it paid for Autonomy, of which $5bn was "linked to serious accounting improprieties, misrepresentation and disclosure failures".
HP's boss, Ms Whitman, said that her firm had relied on the work of the UK unit of Deloitte Touche Tohmatsu, which had acted as Autonomy's auditor prior to the acquisition.
She also said HP had relied on KPMG's audits of Deloitte's work.
The computer maker said it would be taking civil action itself to try and recover money for shareholders.
'Red flags' Shares in the US computer-maker have lost 60% of their value since the Autonomy deal was announced in August last year - including a steep fall on the day after the announcement - and are down by three-quarters since their peak in April 2010.
Continue reading the main story

Hewlett-Packard Co.

Last Updated at 29 Nov 2012, 20:59 GMT

price	change	%
12.89	+ +0.16	+ +1.26

The legal case, which came to light on Wednesday, has been brought by the shareholder against the two auditors, as well as against Autonomy's former chief executive Mike Lynch, HP chief executive Meg Whitman, former HP chief executive Leo Apotheker, and Barclays and Perella Weinberg Partners, who acted as financial advisers on the deal.

It claims that the two auditors, as well as other advisers and employees paid to work for HP, failed in their duty to the company and "consistently misled the public with improper statements".
The two auditors "consciously disregarded numerous red flags" that should have alerted them to Autonomy's allegedly inflated value, the lawsuit said, according to the Bloomberg news agency.
KPMG has denied HP's claims, saying that it was engaged only to provide limited services and did not carry out any audit work.
For its part, Deloitte has insisted that it was not responsible for the due diligence work that HP carried out on Autonomy before going ahead with the purchase.
Barclays and Perella Weinberg could not be reached for comment.
Second lawsuit It is the second such lawsuit to be filed by an HP shareholder over the Autonomy deal. Another investor, Allan Nicolow, filed a similar case at the same court and on the same day.
The other legal case has been brought against Hewlett-Packard, as well as various executives of the firm - but not against the two auditors or the two financial advisers - and seeks damages for HP's purchase of Autonomy, as well as an earlier purchase of Electronic Data Systems Corporation, which the suit also claims was overvalued.
Mr Nicolow's lawyers hope to turn his case into a class action lawsuit on behalf of all investors who owned shares in HP between 19 August 2011 - the day after the Autonomy acquisition - and 20 November 2012.
Autonomy's former head, Mike Lynch - who is a non-executive director of the BBC - has rejected HP's claims that former Autonomy management misled them as to the company's value.