A lawsuit filed in the US by Hewlett-Packard claiming that Autonomy's former management falsified accounts has now dredged up an email to Autonomy head Mike Lynch from Sushovan Hussain, a former finance director of the UK software group, suggesting that by late 2010 the company knew it was heading for a 'plane crash'. It also described 'swathes of reps with nothing to do' who were left 'chasing imaginary deals'. Which sounds like the dotcom bubble 10 years too late.
Bear in mind that HP was about to spend $11bn (£6.7bn) on acquiring Autonomy. It did so in 2011, only to realise that something had gone massively wrong in the coding somewhere and write down the value of the Cambridge-based firm by $5.5bn the following year. By then Autonomy had gone from being one of the most vaunted stocks on the London Stock Exchange to one of its most shorted, as doubts emerged over its ability to maintain its rapid growth. HP boss Meg Whitman duly accused Autonomy of 'creative accounting', in 2012.
The saga has been rumbling on ever since, with HP being sued by its own shareholders and Hussain accusing HP of blocking evidence. For its part, HP called Hussain a ‘fraudster’ who ‘wraps himself in a mantle of self righteousness in an attempt to obtain discovery that he hopes will help him stay out of prison’, adding that both he and Lynch ‘should be held accountable for the fraud’.
And it's a biggie. HP describes it as 'massive', claiming Autonomy inflated its revenues by 21% in 2009, 30% in 2010, and 26% in the first half of 2011. Revenue growth in 2010, wasn't the 17.7% it reported, but a mere 5%, according to HP.
HP even claims that several of the deals on a 'Top 40' deals list provided by Autonomy before the sale were fake - incuding one with the Vatican. Vatican officials have staed in a letter to HP that they were 'unaware' of any involvement with Autonomy at the time.
The latest details have only become even more face-palm-inducing. In the email from Hussein to Lynch, Hussain says 'I really don't know what to do mike', regarding the unravelling situation at the software company, with the vague conclusion that 'revenue fell away completely'. He also seemed to point out that different divisions across the company were keeping separate accounts of sales – and was each therefore massively unaware of the company's 'plane crashes'. Hussain is left pushing for 'radical action' – which HP claims translates as something along the lines of 'bail on this business and sell it to someone else' [our phrasing, not HP's].
Autonomy's former management has hit back back stating it's 'one email taken out of context' and saying the company's forecast was still ahead of its target, despite Hussain's desperate tone. It also maintains that HP still has more than a few questions to answer itself, with the following blistering riposte:
'HP is trying to smear us by leaking partial information and half-truths, here behind the defamation shield of a court filing. After three years, when HP finally starts putting out a case, it turns out to be built on a handful of assumptions that can all be explained, have never been put to the Autonomy team, and prove absolutely nothing.
The real story here is HP’s utter mismanagement of Autonomy, which Meg Whitman is attempting to cover up through an increasingly bitter attack campaign. We will not be her scapegoat.'
This one's going to run and run...