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H.P. Scammed

Paresh Dave |
November 20, 2012 | 11:27 a.m. PST

Executive Director

HP CEO Meg Whitman.
HP CEO Meg Whitman.
A British company Hewlett-Packard bought for $11.1 billion a year ago misrepresented its financial state during the deal, costing HP $8.8 billion, the company announced Tuesday.

HP planned to take legal action against Autonomy, the company it acquired, but resolution of that battle could take years. The company also notified U.S. and British stock market regulators.

HP's stock took a hit Tuesday after it announced the "associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term."

HP chief executive Léo Apotheker resigned shortly after the deal with Autonomy was struck after analysts called it way too expensive. HP has been struggling to revamp its business as PC sales slow in comparison to tablet sales and new printing technologies emerge. The company is now led by Meg Whitman.

“As we discussed during our securities analyst meeting last month, fiscal 2012 was the first year in a multiyear journey to turn H.P. around,” Whitman said in a statement released Tuesday. “We’re starting to see progress in key areas, such as new product releases and customer wins.”

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