The British Serious Fraud Office today dropped its investigation into accusations of accounting improprieties at Autonomy, citing insufficient evidence to continue the investigation, but it made clear that the US investigation would continue.
“In respect of some aspects of the allegations, the SFO has concluded that, on the information available to it, there is insufficient evidence for a realistic prospect of conviction,” according to a statement released by the Serious Fraud Office.
While it’s not exactly a ringing endorsement of Autonomy, it does end the British probe of the matter. The statement went onto say, however, that they have ceded the investigation to US authorities.
The jurisdiction issues were probably tricky here because HP, a US-based company bought UK-based Autonomy in 2011 for $10B, a price that some considered quite high at the time. By the following year, with the deal long done, HP claimed serious accounting irregularities at Autonomy, and a war of words ensued between the two companies, as former Autonomy CEO Mike Lynch vigorously denied the charges.
Alan Pelz-Sharpe, an analyst with 451 Research who has been following Autonomy since 1999, says he isn’t surprised by the results of the British investigation. He says Lynch was quite popular in British technology circles, but he says this announcement doesn’t mark the end of Autonomy’s troubles by any means.
“Of course the investigations continue in the US where there will be much less general sympathy. Were the U.S to drop all the cases that would be remarkable and unlikely. It’s a victory of sorts for the Autonomy team but the battle is far from over,” he said.
It’s worth noting that Pelz-Sharpe himself, submitted papers to the Serious Fraud Office alleging fraud by Autonomy that were passed to him anonymously, just before the sale to HP in 2011.
From the beginning, starting with the high purchase price, this sale has been a technology soap opera with big money, big companies and big egos involved all around. After HP took a huge $8B write-off on the sale and made the fraud allegations public in November, 2012, the drama kicked into high gear.
By May the following year, shareholders were suing HP over its handling of the deal, and the legal wrangling continues.
Amidst all this, even as the companies continue to battle, Pelz-Sharpe explained that HP has absorbed Autonomy into its content management division and continued to sell its products.
“What was [Autonomy] is now a part of the Enterprise Software group. To be fair to HP if you take the whole acquisition debacle out of the equation, they have done a pretty good job of leveraging the assets [from the sale],” he said.
As for HP, they continue to pull no punches that they feel they were wronged by Autonomy in the deal.
A spokesperson told TechCrunch, “As the SFO made clear, the US authorities are continuing their investigation and we continue to cooperate with that investigation. HP remains committed to holding the architects of the Autonomy fraud accountable.”
Regardless, today’s decision by British authorities only ends the official British scrutiny of the company. The US investigation is on-going and we have probably not seen the end of this story yet.
Note: This story was updated with a quote from HP.
