[Info-vax] HPE buys Cray

[Arne Vajhøj]

On 5/20/2019 8:02 PM, Kerry Main wrote:
>> From: Info-vax <info-vax-bounces at rbnsn.com> On Behalf Of Dave Froble via Info-vax
>> Sent: May 20, 2019 5:00 PM
>> On 5/18/2019 10:50 AM, Kerry Main wrote:
>>
>>> Well, Cray must still have some smarts and/or value add left.
>>
>> Kerry, you're talking about HP.  Remember the British company they spend
>> something like 9 billion on?
> 
> You mean Autonomy who cooked their books and who the US DOJ launched
> criminal charges last Nov against their CEO and VP of Finance?
> 
> <http://fortune.com/2018/11/30/hewlett-packard-autonomy-doj-lawsuit/>
> Nov 30, 2018 - The Department of Justice filed criminal charges on Friday
> against former Autonomy CEO Mike Lynch, accusing the British executive of
> misrepresenting Autonomy's finances in the lead up to the company's $11
> billion sale to HP in 2011. Autonomy's then vice president of finance,
> Stephen Chamberlain, is also named as a defendant in the lawsuit."
> 
> A more recent update: Mar 22, 2019
> <https://www.accountingtoday.com/articles/hp-readies-5b-accounting-fraud-tri
> al-against-autonomy-founder-mike-lynch>

Yes.

There is every reason to suspect serious foul play.

But that does not make HP look good.

https://www.theguardian.com/business/2019/mar/28/hewlett-packard-six-hours-of-due-diligence-on-autonomy-court-told

<quote>
HP carried out only a brief period of due diligence to use the Autonomy 
purchase as a “counterpoint to various bits of bad news that HP was 
expected to publish” on the same day the deal was announced, the 
defence’s opening submission to the high court in London stated. The due 
diligence allegedly started on 1 August and ended on 18 August, the day 
on which HP’s strategy change was announced.

The defence’s submission said: “The due diligence of Autonomy’s finances 
was limited and largely consisted of four conference calls lasting 
approximately 1 to 1 1⁄2 hours.”

Accountants KPMG, software consultants Black Duck and the law firm 
Freshfields assisted HP in the due diligence, a process of checks that 
corporate buyers carry out on acquisition targets. However, KPMG was 
unable to complete its checks before the announcement, the defence said.

The defence’s submission said: “While KPMG had been contracted to 
provide a number of services in relation to the due diligence, HP’s 
tight timetable meant that by this point they had not carried out all of 
the tasks which they had been engaged to carry out. HP nevertheless 
decided to go ahead.”
</quote>

https://www.theregister.co.uk/2019/04/03/apotheker_autonomy_buyout/

<quote>
Apotheker told the High Court he had not seen a final due-diligence 
report from HP advisers KPMG before committing to the acquisition – and 
that he acted partly on the advice of Peter Weinberg from corporate 
advisory firm Perella Weinberg when deciding to approve the $11.7bn sum 
HP shelled out for Autonomy.

“Did you ever read any report by KPMG on the due diligence?” Miles asked 
Apotheker, to which the former CEO replied: “No, I didn’t.” The court 
heard the auditors produced a draft report by August 9, 2011, about a 
week before the acquisition was announced – and Apotheker didn’t even 
read that. A final report never showed up from KPMG, the court heard, 
not that Apotheker ever realized the auditors had not produced a 
finalized dossier.
</quote>

Arne