An indictment has been issued by a US grand jury for a former Autonomy executive accused of inflating the British software firm's financial performance before Hewlett-Packard paid $11 billion for it in 2011. Former Autonomy chief financial officer Sushovan Hussain of Britain was charged with fraud and conspiracy crimes carrying a maximum sentence of 20 years in prison.
The indictment issued in San Francisco federal court on Thursday calls for Hussain to surrender at least $7.7 million he made from his shares in publicly traded Autonomy when it was bought by HP in what turned out to be a disastrous deal. Beginning in October of 2009 or even earlier, Hussain and others engaged in a scheme to inflate Autonomy's financial performance to earn bonuses, gain prestige, drive up the share price, and get more money from a buyer, according to the indictment.
The scheme included false entries in books and records, as well as "intimidating, pressuring, and paying off" people who criticized or complained about its accounting practices, the indictment said. In late 2012, HP reported a write-down of $8.8 billion, including more than $5 billion it attributed to inflated data from Autonomy, which it acquired the prior year.
The California-based computer titan demanded US and British authorities investigate Autonomy, saying "accounting improprieties" led to an "overvalued" acquisition price, which forced HP to take the huge write-down in value. HP added that it had launched an internal investigation "after a senior member of Autonomy's leadership team came forward." As a result, HP said it believed "that Autonomy was substantially overvalued at the time of its acquisition." HP has also filed a civil suit. Autonomy executives have denied any wrongdoing.
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