It is terribly sad to me to watch this great company utterly destroyed by mismanagement.
Hewlett’s Loss: A Folly Unfolds, by the Numbers
By MICHAEL J. DE LA MERCED and QUENTIN HARDY
(snip)
Peter DaSilva for The New York Times
Meg Whitman, the chief executive of Hewlett-Packard, said that at Autonomy, there had been “a willful effort by some company executives to mislead investors and potential buyers.”
Reuters
Carleton S. Fiorina’s efforts to merge the company with Compaq led to a proxy fight with the children of one of Hewlett-Packard’s founders. The board fired her in 2005.
For Hewlett-Packard, the alarm bells started ringing less than a year after the technology company bought a British software maker for $11.1 billion.
Unhappy with the business’s sagging performance, H.P. ousted the software company’s mercurial Cambridge-educated founder and sent a team to England to review its books last May. It was then that a senior finance official at the British company stepped forward, raising questions about the accuracy of the numbers.
Months of investigation followed, prompting Hewlett’s accusations on Tuesday that the British software maker, Autonomy, had engaged in “serious accounting improprieties.” Before the deal, H.P. claimed, Autonomy inflated its sales. The problems went undetected by outside accountants — both Autonomy’s auditors and a firm H.P. hired to vet the deal.
The accounting issues at Autonomy, which sells software that examines data for patterns, cost Hewlett more than $5 billion.
Now, the Autonomy matter has been referred to regulators in two countries, and the Federal Bureau of Investigation has opened a case, according to people briefed on the matter who were not authorized to speak publicly. H.P. is also considering its own legal action. “This took time” to uncover, said Meg Whitman, H.P.’s chief executive. The issues, she said, “were designed to be hidden.”
Hewlett can’t escape the onslaught of bad news.
In recent years, what was once a giant of Silicon Valley has been buffeted by management turnover, board controversy and waning profits. The company, which previously rivaled the likes of I.B.M., Cisco and SAP, has watched the value of its stock erode sharply.
Even before the accounting problems, the Autonomy acquisition looked troubled. Within weeks, the deal contributed to the downfall of the chief executive at H.P. and led to squabbles among company’s directors, including Ms. Whitman, who took over in September 2011.
(rest of article linked below)
dealbook.nytimes.com |
