One can appreciate the enduring angst of a major corporation that has cocked up a multi-billion dollar acquisition but the HP management’s character assassination of former Autonomy officials, including Mike Lynch, has lurched beyond legal expediency into the realm of moral indecency.
HP has now labelled former Autonomy management as fraudsters – libel laws in the UK properly put a gag on this kind of language but in the age of the internet calumny and malice wing across global boundaries.
Mike Lynch says simply: “There was no fraud.” And he has told HP to let the proper authorities decide.
The Serious Fraud Office in the UK and its counterparts in the US are the ‘proper authorities’ in this case and should be allowed to pursue their enquiries in a forensic manner before delivering their findings. The only currency they will be dealing in is facts – not hysteria, guilt or convenient blame.
After HP’s “fraudsters” onslaught in the States last week. the former Autonomy management issued a no-nonsense response that said as much.
“This breathless ranting from HP is the sort of personal smear we’ve come to expect. As the emotional outbursts go up, the access to facts seems to go down.
“HP has struck a corrupt and collusive settlement to try to bury the truth rather than face a court. Meg Whitman is buying off a bunch of lawyers so she doesn’t have to answer charges of incompetence and misdirection in front of a judge and jury. Quite simply we are asking for discovery and facts, they are trying to hide them – that’s what separates us and her.”
The reference to the ‘bunch of lawyers’ refers to a fancy piece of footwork by HP who persuaded the lawyers suing HP on behalf of shareholders to turn their fire on Lynch and Co – earning multi-million dollar retainers in the process.
Mercenaries tend to suspend moral arguments and grab the most lucrative flag of convenience so the authorities – maybe the courts – will have to make up their own minds about this volte face.
There are a number of matters arising from the latest war of words. HP has indicated to the FT that it may take UK court action against the former Autonomy management. It is hard to see how any court could possibly hear such a case before the SFO had completed its deliberations, so that may just be more sabre rattling by the HP cavalry.
I would be very surprised if someone as astute as Mike Lynch doesn't consult his own lawyers over the fraudster allegations which would appear to be a serious impediment to a man trying to build a new business as a Venture Capitalist with the Cambridge-based Invoke Capital.
It is a legendary trick in combat to create diversions by blowing things up, creating choking clouds of smoke so the protagonists lose sight of their target.
My vision is unclouded in one important aspect of the HP-Autonomy transaction. I have never lost sight of the fact that HP and Autonomy professionals earned many millions of pounds in the acquisition. Their task was simple – to check the books. To check them again and again - which professionals acting for both parties in the deal said is exactly what they did.
So were those parties complicit in perpetrating a fraud or just plain incompetent in failing to spot one and giving the green light to the deal? If former Autonomy management end up in a dock then it will surely need to be extended by a few yards to accommodate a handful of bankers, accountants and lawyers from both sides of the Pond.
There is a final issue to broker into this mess. That is HP’s management of Autonomy since the acquisition and how much the American corporation’s inexperience or incompetence in the field of software has diluted – perhaps torpedoed – the potential of the business.
Sometimes in business, as in life, management just has to hold up its hands and admit: ‘We’ve screwed up.’
The HP-Autonomy situation has gone way past ‘Caveat Emptor.’ It’s turned from a white knuckle ride into a train crash.