Former HP CEO Leo Apotheker Takes CYA Strategy
Leo Apotheker has made a statement today regarding this disaster of a situation at Hewlett-Packard Co. (NYSE: HPQ). This sort of matters since Apotheker was the CEO who pushed for the acquisition of Autonomy. The main move here seems to be that he said that the alleged accounting improprieties come before the HP-Autonomy merger and that they only came to light from a whistleblower inside the company and after his departure.
I'm both stunned and disappointed to learn of Autonomy's alleged accounting improprieties. The developments are a shock to the many who believed in the company, myself included. But I also share the sentiment of HP's current leadership and continue to believe in Autonomy's market potential, as its core software expertise remains sound.
Looking back on the acquisition, which closed in Sept. 2011, the due diligence process was meticulous and thorough, and included two of the world's largest and most respected auditing firms working on behalf of HP. Since Autonomy was a public company in the UK, much of the process relied on public financial reports — accounting statements approved, filed and backed by Autonomy's leadership, board and auditors.
According to HP, the accounting issues it discovered pre-date its acquisition of Autonomy. As such, it's apparent that Autonomy's alleged accounting misrepresentations misled a number of people over time - not just HP's leadership team, auditors and directors. In fact, the alleged improprieties apparently came to light only after an internal whistleblower raised the issue in the spring, well after my departure.
I will make myself available, however I can, to assist HP and the appropriate authorities get to the bottom of this.
What you just saw was a CYA move, a "cover your assets" move of sorts. Apotheker's strategy as HP CEO failed and the current strategy is failing as of now. Even before today's revelation, Meg Whitman said that it would be a turnaround story out to 2016.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Accounting, Corporate Governance, Mergers & Acquisitions, Software, Technology, Technology Companies Tagged: HPQ