'I had to blow the whistle on Autonomy' says HP's Meg Whitman

The mud-slinging continues in the ongoing HP/Autonomy saga as Whitman admits, 'Knowing what we know, now we paid too much'.

by Rebecca Burn-Callander
Last Updated: 05 Aug 2014

Whitman has defended her decision to go public over the Autonomy scandal, which led to a £5.7bn write-down at HP back in November. ‘The magnitude of the accounting improprieties, the disclosure failures, the outright misrepresentations, was so substantial that there was not even an option to not be straight up about this, because we needed to explain to our investors, to employees, what had actually happened here,’ she says.

The furore centres on HP’s $11.1bn acquisition of Cambridge-based tech firm Autonomy in 2011. Late last year, HP alleged that it had been misled over the true value of the firm due to some ‘creative accounting’ during the due diligence process.

Although the deal was done by her predecessor Léo Apotheker, Whitman is not without egg on her face. She was one of the board directors who approved the deal. ‘With 20/20 hindsight, knowing what we know, now we paid too much,’ she admitted yesterday. Autonomy founder Mike Lynch, who left the company last year, has categorically denied any wrongdoing.

Speaking candidly to UK staff yesterday, the HP boss also revealed that by allowing the scandal to blow up in the media, untold damage has been done to the firm’s reputation. Regulators were called in on both sides of the Atlantic, culminating in the resignation of HP's chairman and two board directors last week after a shareholder revolt. Morale at the firm hit an all-time low, Whitman admits. ‘It has taken them a few months to rebuild their confidence. This was very hard on them,’ she says.

Whitman has, however, dispelled rumours that HP plans to offload Autonomy in the wake of the scandal, saying, ‘We remain committed to this technology, we remain committed to Cambridge, we remain committed to the UK, we are going to grow this business.’

Whitman used the opportunity to outline her five-year plan for the brand. HP will be redoubling its efforts to create its own smartphone, she said, and is planning to move away from its relationship with Microsoft to embrace Google technologies. Despite these strategic pivots, revenues are unlikely to grow for a further two years.

All eyes are now on HP following the multi-billion dollar writedown to see if the world’s largest computer maker can reverse its fortunes. Whitman, as HP’s third leader in just over a year, is under considerable scrutiny. Can the woman who turned eBay into an online retail giant pull off a similar turnaround at HP? Only time will tell.

Read MT's EXCLUSIVE interview with Autonomy's Mike Lynch

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