HP wanted out of the Autonomy deal but lacked an excuse tips insider

HP got cold feet in the run up to the Autonomy acquisition but could find no accounting evidence to extricate itself, insiders claim, in the aftermath of an $8.8bn hit for alleged "irregularities" by senior execs. Rumors had circulated prior to the deal closing that Autonomy's growth was partly the result of creative accounting, the WSJ reports, and sources suggest HP's internal team dealing with the acquisition was aware of the allegations.

According to at least one of the sources, HP was hoping to find some way in which it could back out of the deal as a result of the concerns. However, the company was unable to find a suitable material accounting issue, it's alleged.

In a statement today, HP CEO Meg Whitman blamed former HP CEO Leo Apotheker and former CSO Shane Robison for not identifying the irregularities, which are claimed to include misrepresenting hardware and software sales, among other financial fudges. Whitman also criticized the arrangement whereby Autonomy auditors Deloitte and KPMG reported to HP execs other than the CFO.

Autonomy's former execs deny any wrongdoing, and point out that the audits found no inaccuracies. However, a dossier highlighting flaws in Autonomy's reporting apparently circulated when the HP acquisition was initially announced, with one-time rival suitor Oracle publicly stating that it felt the company was too expensive.