OK, so you need a bit of background here. Autonomy was bought by HP and then HP wrote down the value of what it had bought by some massive percentage of that purchase price. 80% or so, around and about there.
HP is saying that the write downs came because Autonomy had been fiddling the books. And, well, no comment. A more general market view is simply that HP massively overpaid.
So, HP has now submitted revised accounts in the UK for the UK section of Autonomy. And the old owners of Autonomy have come out swinging:
“Other causes of the change including explicitly stated changes in accounting policy. We note that a majority of the change in numbers is due to transfer pricing between jurisdictions, a mechanism which often reduces a company’s tax bill in the UK. We hope the UK government will take a robust position in rebuffing HP’s attempts to deprive it of over £38m in tax revenue.”
HP has filed a £38.4m rebate claim for taxes Autonomy paid in 2009 and 2010, arguing the bill was inflated by overstated profits. HMRC has not yet agreed to repay any sum.
My own, entirely personal, view and one that is not well informed in any manner is that both sides have something to answer for here. This is driven by the fact that I could never really understand what Autonomy’s software did: and nor did some reasonably large number of the people who bought it. It was quite famous in the industry for this. And HP at the time was most certainly run by people who would massively overpay for anything that looked “strategic”. A bit like that crew that took GEC down a decade ago.