Dr. Mike Lynch, otherwise known as Britain’s Bill Gates, could face jail after a cover up was unearthed in a deal that saw HP acquire his company Autonomy for more than the exact price, after inflating the company’s revenue and profits.
Dr. Lynch, who himself later joined HP, is said to have made £500 million from the cover up
HP has since said it had been ‘lied to’ before the takeover accusing top executives at Autonomy of having used elaborate accounting techniques to inflate the company’s balance sheet at least 2 years before the deal was completed.
Following a revelation by a former executive at Autonomy, the British tech-entrepreneur could be subject of a serious fraud investigation even as he risks suspension by the British Broadcasting Corporation where he is a non executive director.
Autonomy a computer programs company that provided services for SME’s in Britain had been classified in the FTSE 100 index that puts together British most successful companies.
This means HP will have to take a £7.1 billion shillings charge. HP says accounting missteps led to more than £3 billion of the while the rest is linked projections and share value estimates that missed expectations.
The write-down erases all the money HP made last quarter.
This revelation comes at a time HP battles a slowdown in its personal-computer, printer and technology services businesses as well as boardroom turmoil is expected not auger well with investors even as the company dropped to its lowest level in 10 years at the DOW.
The company’s share has dropped by over 11 percent following the news, even as economic pundits warn the company could drop out of the DOW 30.