The Senior Fraud Office and US Department of Justice have begun their investigation into Hewlett Packard's purchase of British software firm Autonomy, following accusations of foul play when negotiating the value of the company for takeover; however a 'conflict of interest' could yet scupper the case entirely.

Last November, HP chief executive Meg Whitman described a 'wilful effort' to 'mislead investors and potential buyers' following a £5.5bn writedown after the £10bn purchase in 2011, allegations that Autonomy founder Mike Lynch flatly denied.



A HP statement released yesterday said: "The UK Serious Fraud Office advised HP that they had also opened an investigation relating to Autonomy.


"HP has provided information to the UK Serious Fraud Office, the US Department of Justice and the SEC related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP's acquisition of Autonomy."

However, according to the BBC, the investigation has already hit a snag.

"The SFO also said there had been reports that it used an Autonomy software product, Introspect, which is a document management tool. This could mean that the SFO is in the unusual position of having to decline an investigation because of a conflict of interest."


HP shareholders have already begun grumblings of discontent over the handling of the takeover and ensuing allegations, which saw shares plummet 12% to their lowest price in a decade. With senior HP staff already seething from the Autonomy deal, seeing the case thrown out on an ironic technicality would be disastrous.


"The SFO is keen to ensure that there is now no conflict of interest or perception of such a conflict, and it is obliged as a first step to make inquiries to ensure that it can continue as the investigating body," said the Senior Fraud Office in a statement.