Nov 22, 2012

HP debacle could set new bar for incompetence

Hewlett Packard has written off some $US8.8 billion from its investment in UK software firm Autonomy. The list of suspects responsible is growing and alarming.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

Normally a failed business deal in the US or Europe with no obvious links to Australia rates only the briefest of mentions. But the growing reaction to the $US8.8 billion write-off of the $US11.1 billion cost of UK software firm Autonomy by tech giant Hewlett Packard in early 2011 tells us this is going to be one of those business disaster stories that will contain lessons for business, shareholders and advisers the world over.

It recalls the worst of the tech wreck scandals from a decade ago and confirms no matter how much you tighten regulations there will still be dud deals, poor regulation, weak management and oversight, and inadequate auditing. In short, you can’t legislate away duds. This is a message as applicable in Australia as it is in the US and UK.

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