It has created ripples in the corporate sector.
Hewlett-Packard Company(NYSE:HPQ) on Tuesday said that
it would have to take a charge of $8.8 billion related to its acquisition of
software firm Autonomy, following a massive accounting scaldal in the latter.
On Tuesday the computer and server maker said that it
had discovered "serious accounting improprieties" and "a willful
effort by Autonomy to mislead shareholders," after a whistleblower came
forward following the May ouster of former Autonomy Chief Executive Mike Lynch.
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Shares in HP plunged more than 12 percent after the
announcement, falling to a 10-year low.
"Most of the board was here and voted for this
deal, and we feel terribly about that," Chief Executive Whitman said on a
call with analysts.
Tuesday's announcement came just three months after
the company took a write-down of almost $11 billion on its EDS services
division.
HP is feeling the brunt of the slowdown - not only of
the broad economy but also a shift in consume preference to traditional
computing devices to tablet PCs and other mobile devices.
The market capitalisation of the company, once hailed
for its efficiency and technical excellence has dropped to $20 billion from $55
billion in about 12 years.
HP said it has referred the alleged accounting
wrongdoing at Autonomy to the U.S. Securities and Exchange Commission's
enforcement division and the UK's Serious Fraud Office for civil and criminal
investigation. HP also said it would take legal action to recoup "what we
can for our shareholders."
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