Posted: Nov 20, 2012 7:28 AM
NEW YORK - Hewlett-Packard says a British company it bought for $10 billion last year lied about its finances, resulting in a massive write-down of the value of the business.
HP is avoiding calling it a fraud, but says there were "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC."
HP is taking an $8.8 billion charge in its latest quarter to align the accounting value of Autonomy with its real value. It said most of that charge was due to the fictional accounting at Autonomy.
The revelation is another blow for HP, which is struggling to reinvent itself as PC sales shrink.
Among other things, Autonomy makes search engines that help companies find vital information stored across computer networks.
Hewlett-Packard Co. shares sank more than 8 percent to $12.20 in premarket trading.
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