HP Shares Plunge After $8bn Writedown linked to Autonomy Takeover

Hewlett Packard has accused the British software firm Autonomy of bloating its value before the US computing giant acquired it for $10.3bn in August of last year.

The allegations have been referred by HP to the Serious Fraud Office in Britain and the US Securities and Exchange Commission's Enforcement Division.

HP said it is "extremely disappointed" after it claims an internal investigation found evidence of "accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company".

"We remain 100 percent committed to Autonomy and its industry-leading technology," said the US-based IT company in a statement.

Shares in HP fell more than 13 percent in the opening minutes of trading in New York to change hands at $11.50 each. So far this year HP shares have fallen more than 55 percent.

HP announced a non-cash impairment charge of $8.8bn relating to Autonomy in its fourth quarter financial results.

Of this, more than $5bn was linked to its allegations, claimed the company.

An internal probe was launched after a whistleblower from Autonomy's senior management purportedly made serious allegations to HP bosses.

HP said that its investigation led to the conclusion that Autonomy had been "substantially overvalued" at the time of the takeover.

The writedown is the second $8bn adjustment to HP earnings in less than four months after the group announced an $8bn charge in August against the$13.25bn purchase of Electronic Data Systems in 2008.