The Due Diligence HP did on Autonomy sounds like an absolute shambles if this article is anything to go by: https://www.theguardian.com/business/2019/mar/28/he

The Due Diligence HP did on Autonomy sounds like an absolute shambles if this article is anything to go by: https://www.theguardian.com/business/2019/mar/28/hewlett-packard-six-hours-of-due-diligence-on-autonomy-court-told https://www.theguardian.com/business/2019/mar/28/hewlett-pac... 6 hours of cursory 'scrutiny' before they decided to blow £8bn on the acquisition... I wonder if the (now ex-) CEO would be interested in buying my house? And what was the rest of the board doing when the CEO decoded to trample on due process to get the deal over the line in a hurry? Cathie Lesjak, the HP CFO, never even read KPMG's preliminary DD report (https://www.accountingweb.co.uk/business/finance-strategy/hps-cfo-admits-to-never-reading-the-due-diligence-on-autonomy https://www.accountingweb.co.uk/business/finance-strategy/hp...). Interestingly, the KPMG report itself can be downloaded from the above site and I have given it a brief glance (thus surpassing Ms Lesjak's pre-purchase attention). It is pretty clear from the caveats and predicating statements in the report (e.g. 'We make no representation for the sufficiency of your purposes of the procedures you selected, and those procedures will not necessarily disclose all significant matters about Target or reveal errors in the underlying information, instances of fraud, or illegal acts, if any.') that KPMG was saying 'Look, bud - you hired us in a very limited capacity, knowing the data was bad: the consequences of this going belly-up are gonna be your problem, not ours'. To be fair, this is probably par for the course in many transactions. What is interesting is that the report does look at revenue recognition, which is supposedly a major contributor to the eventual SNAFU (out by 38%!!! - see https://www.itpro.com/strategy/24554/hp-says-autonomy-revenue-was-wrong-by-38 https://www.itpro.com/strategy/24554/hp-says-autonomy-revenu...). Page 26 even says 'We understand that your auditors may provide a grace period post acquisition to perform a more rigorous analysis using the industry accepted calculation methodology.' (Did they do this?) HP was determined to buy without looking under the hood because it was afraid it would be pipped to the post by Oracle. Subsequently, the Serious Fraud Office dropped an investigation against Lynch and Hussain (CFO) because of insufficient evidence. 38% is material enough to not just be a 'to-mah-toe / to-may-toe' difference of opinion, so maybe there are grounds for a further grilling of Mr Lynch. However, given the clear incompetence of HP's board and the shoddy DD they did, and the fact that the SFO could not find grounds to pursue the case, I would have thought that handing over a UK citizen to the US when he was at the time of the deal managing a UK co listed on the London Stock Exchange seems to indicate undue pressure has been brought to bear on the junior partner in the 'special relationship'. I won't have much sympathy for either the incompetent or the shady (if this is the case) if they wind up in a relationship that has gotten messy, but this does not reflect well on the extradition reciprocity of US and UK.