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Thursday, April 24, 2014
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HP former CEO says board shares blame for Autonomy deal
Hewlett-Packard Company’s former chief executive officer Leo Apotheker, who has drawn criticism for the troubled acquisition of Autonomy Corporation, said the company’s board—led by chairman Ray Lane—shares responsibility for the deal.
“No single CEO is ever able to make a decision on a major acquisition in isolation, particularly at a company as large as HP and certainly not without the full support of the chairman of the board,” Apotheker said in an e-mailed statement yesterday. The HP board, led by its chairman, met many times to review the acquisition and unanimously supported the deal, as well as the underlying strategic objective to bolster HP’s market presence in enterprise data.”
The statement by Apotheker—who was ousted by the board as CEO in September 2011 after less than a year on the job—is an attempt to draw attention to others involved when Hewlett- Packard agreed to buy Autonomy for US$10.3 billion last year. The Palo Alto, California-based computer maker took an US$8.8 billion writedown on the deal last month. More than US$5 billion of the charge was due to “serious accounting improprieties” at Autonomy, Hewlett-Packard said.
Current CEO Meg Whitman, who was on the board when the Autonomy deal was approved, has also tried to distance herself and other board members from the decision. “The CEO at the time and the head of strategy who led this deal are both gone—Leo Apotheker and Shane Robison,” Whitman said on a November 20 conference call. Robison was the former chief technology officer and head of mergers and acquisitions who departed last year.
Hewlett-Packard said that Autonomy booked hardware sales to appear as more profitable software, and used transactions with resellers of its software to accelerate revenue recognition or fabricate sales. The revelations are the latest blow for leadership at a company that’s suffered through years of botched deals, management tumult and strategic missteps.
Hewlett-Packard’s stock has plunged 69 per cent since it ousted former CEO Mark Hurd in August 2010. In his statement, Apotheker said the company is still suffering from problems he tried to right by expanding into software and seeking to spin off its personal computer business.
“Looking back on my time at HP, I still believe the strategic vision that we tried to implement was sound,” he said. “HP was and still is in need of a transformational strategy,” including a push into software and a review of the company’s “decades-old” PC business, Apotheker said.
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