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SFO Fears It Could Be ‘Conflicted’ In HP Autonomy Investigation

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Investigation thrown into confusion over SFO’s £4.6m contract with Autonomy

The UK Serious Fraud Office (SFO)’s investigation into alleged accounting mispractices prior to the HP’s Autonomy takeover has come into problems already, after the agency said it was determining whether its use of Autonomy software amounted to a conflict of interest.

The SFO uses Autonomy’s Introspect to trawl through massive files of electronic data in complex economic crime investigations, having awarded the firm a £4.6 million deal in 2009 that it was extended in 2011.

It said that Introspect was just one of the systems it uses in its digital forensics, but that it was assessing whether a conflict of interest, or the perception of such a conflict, meant that it could no longer continue the investigation.

HP Autonomy investigation

hp logo discover frankfurt 2012The SFO’s involvement was only revealed earlier this week in a filing made by HP to the US Security and Exchange Commission (SEC), but if it deems itself unfit to proceed, then another body, such as the City of London’s economic crime unit would have to step in.

HP announced an $8.8 billion (£5.3 billion) writedown on the value of Autonomy in November, having accused Autonomy’s senior management team of improper accounting practices designed to inflate the price HP paid for the Cambridge-based developer, which it acquired for $10.3 billion (£6.7bn) in 2011.

HP passed on the findings of an internal investigation to UK and US authorities. The FBI has launched its own investigation, while the US Department of Justice is also looking at the matter. Former Autonomy CEO Mike Lynch vehemently denies the allegations and earlier this year said HP was backtracking from its claims.

It has been suggested that the SFO is being overly cautious to prevent a repeat of mistakes made in a fraud causes against Robert and Vincent Tchenguiz last year. Errors in its application for search warrants meant that the agency had to drop its investigation. The brothers are now suing the SFO for £300 million, claiming that their arrests caused huge damage to their reputations and business.

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