SAN FRANCISCO - Hewlett-Packard's (IW 500/7)woes deepened Tuesday as the U.S. tech giant reported a massive loss, blaming deliberate financial misstatements from a British software firm it bought last year.
HP called for a probe by U.S. and British authorities of software maker Autonomy, saying "accounting improprieties" before the acquisition led to an "overvalued" acquisition price, which forced HP to take a huge writedown in value.
HP's share price tumbled 11.95% to close at $11.71, as the new woes weighed on the U.S. computer giant already struggling with a changing technology landscape.
The bombshell came when HP said it was taking a writedown of $8.8 billion, largely because of the reduced value of the software company acquired just over a year ago.
While writedowns under accounting rules are not unusual for slumping firms, HP said this was a case of deliberately misleading statements by Autonomy that went unnoticed until now.
"HP has referred this matter to the U.S. Securities and Exchange Commission's Enforcement Division and the UK's Serious Fraud Office for civil and criminal investigation," HP said, as it announced a big hit to earnings.
The California firm said it was also "preparing to seek redress against various parties in the appropriate civil courts" over the losses.
