Former Ivory Coast leader’s wife wanted by ICC

THE HAGUE, Netherlands (AP) — The International Criminal Court unsealed an indictment Thursday against former Ivory Coast President Laurent Gbagbo‘s wife on charges including murder, rape and persecution. It was the first time in the court’s 10-year history it has charged a woman.

The world’s first permanent war crimes tribunal said the arrest warrant was issued on Feb. 29 for former first lady Simone Gbagbo for crimes against humanity.

Her husband, Laurent Gbagbo, is already in custody at the court’s detention unit in The Hague facing similar charges stemming from his fight to retain power after losing a 2010 presidential election. If his wife is extradited, they could face justice together in an unprecedented husband-wife trial.

But a senior member of Ivory Coast President Alassane Ouattara‘s government, who requested anonymity because he wasn’t authorized to speak to the media, said Ivory Coast has already informed the ICC that the nation will not let her go.

“We informed them of this a long time ago,” he said.

The court’s chief prosecutor, Fatou Bensouda, urged Ivory Coast to extradite Gbagbo.

“The type of crimes committed in the aftermath of the 2010 elections did not happen by chance — they were planned and coordinated at the highest political and military levels and all those bearing the greatest responsibility must be held to account,” Bensouda said in a statement.

She said prosecutors continue to investigate crimes committed by both sides in Ivory Coast’s bloody power struggle and expect to issue further arrest warrants in the future.

“The investigations are objective, impartial and independent, and are conducted in strict accordance with the law,” she said.

Ivory Coast officials are holding the 63 year old under house arrest in the northwest town of Odienne. Last week, Ivorian prosecutor Noel Dje Enrike Yahau said lawyers had questioned Simone Gbagbo there for two days and that the domestic charges against her remained the same: genocide, blood crimes and economic crimes.

Unsealing the ICC arrest warrant issued nearly nine months ago appears to be a tactic by the court to put pressure on Ouattara’s administration to hand over Ms. Gbagbo.

If authorities in Ivory Coast want to prosecute her, they have to convince judges at The Hague tribunal that their case involves the same crimes she is charged with at the ICC. It is a court of last resort, meaning it only takes cases from countries unwilling or unable to prosecute them.

The international court said in the warrant that there is evidence pro-Gbagbo forces deliberately attacked perceived supporters of Ouattara in the aftermath of the election.

Judges who reviewed evidence supporting the charges against Ms. Gbagbo said they found “there are reasonable grounds to believe that Ms. Gbagbo bears individual criminal responsibility for the crimes … as ‘an indirect co-perpetrator.’”

The warrant called Gbagbo an “alter ego for her husband” with the power to make state decisions. It said there is evidence to suggest she “instructed the pro-Gbagbo forces to commit crimes against individuals who posed a threat to her husband’s power.”

Her husband was the first former head of state to be taken into custody by the court when he was extradited to The Hague by the Ivory Coast government last year.

Prosecutors say about 3,000 people died in violence by both sides after Gbagbo refused to concede defeat following the election. Ouattara finally took power in April 2011 with the help of French and U.N. forces.

Ivory Coast is not a member state of the court, but has voluntarily accepted its jurisdiction.

It is very rare for a woman to be charged by an international war crimes court. In the past, the Yugoslav war crimes tribunal convicted former Bosnian Serb President Biljana Plavsic of persecution and sentenced her to 11 years imprisonment.

The announcement of the arrest warrant and Ivory Coast’s refusal to hand over Gbagbo appeared likely to raise tensions between supporters of her husband and those who back Ouattara.

Moussa Toure Zeguen, a leader of the Gbagbo allies in exile in Ghana, said by phone from Accra that the former president’s supporters had no faith in the Ivorian authorities to give Simone Gbagbo a fair trial.

“We don’t trust them. The only thing that Ouattara is doing is revenge,” Zeguen said. “He wants to try us without trying any of the fighters from his side who also committed crimes. It is not fair, and this cannot bring reconciliation.”

____

Associated Press writers Rukmini Callimachi in Dakar, Senegal, and Robbie Corey-Boulet in Abidjan, Ivory Coast, contributed to this report.

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PlayStation Mobile Now Lets PS Vita Owners Create Their Own Games

Think you (or someone you know) has what it takes to write games for the PlayStation Vita? Sony just opened up its PlayStation Mobile game store to anyone who wants in. All you need is a half-decent Windows PC and a Vita, and the cash for a $ 99 developer fee — the same yearly price Apple charges.

​How PlayStation Mobile fits in

PlayStation Mobile isn’t the same thing as the PlayStation Store, where you can buy most PlayStation games and downloadable content. It’s more like a separate department that’s only on the PlayStation Vita and on PlayStation Certified Android devices like Sony’s smartphones and tablets.

In a nutshell, it’s Sony’s version of Xbox Live Indie Arcade, except that it’s for portable PlayStation consoles instead of home Xbox ones. It’s where small, indie studios can get their work published and featured, and where PlayStation Vita owners can look for unique, inexpensive game titles.

​How developers can get started

Game developers can start with PlayStation Mobile by registering on its developer site. After that, they download the PlayStation Mobile SDK (software development kit), and get to work on their games. Third-party software like the free Blender 3D modeling program can be used to create in-game art assets, while the SDK itself is powered by the open source Mono version of C#, the same programming language used by Xbox Live Indie Arcade’s XNA toolkit.

​How PlayStation Mobile compares to other game and app markets

For starters, the $ 99 annual fee and the cost of a PlayStation Vita or PlayStation Certified device put it right up there with Apple’s App Store in terms of up-front expense, except that you don’t have to buy a Mac to write things for it. This is a lot more than the $ 25 one-time fee to get in to the Google Play store, which you can use pretty much any computer and Android device to write for. On the other hand, anyone who’s considering writing PlayStation Vita games probably already owns a Vita to begin with.

Developers aren’t allowed to write non-game apps for PlayStation Mobile, unlike with most markets. Pretty much the only apps seen on the Vita so far are official licensed ones like YouTube and Flickr, while PlayStation Certified devices running the Android OS get their apps from the Google Play store anyhow.

Perhaps the strangest restriction? Developers don’t get to set their own games’ price. They instead specify a “wholesale price,” as though they were selling their games to Sony, and it decides how much to sell them for. In essence, the company chooses its own profit margin on a per-game basis, unlike most app markets’ 70/30 split. It also seems to be able to decide when and whether games go on sale.

​Success stories?

Rami Ismail told “The Story of Super Crate Box” on the PlayStation Blog, explaining how he and a fan managed to bring an iOS game that he’d already made to the PlayStation Vita on very short notice. He said the game “feels right at home” on the portable console, while Joystiq’s JC Fletcher calls the Vita port “the definitive version.” As for whether it’s selling well or not, though, we may have to wait to find out.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

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Tom Hanks, Will Farrell offer custom recordings

NEW YORK (AP) — Imagine having William Shatner supply your outgoing voicemail message. Or maybe you’d prefer Morgan Freeman coolly telling callers to wait for the beep. Or perhaps having Betty White joke around is more your speed.

All it takes is $ 299 and some luck.

The advocacy group Autism Speaks is offering custom-recorded messages from those celebrities as well as Will Ferrell, Carrie Fisher, Tom Hanks, Derek Jeter, Leonard Nimoy, Patrick Stewart and Ed Asner.

From Dec. 3 to Dec. 9, a limited number of 20-second long MP3 messages will be recorded by each celebrity on a first-come, first-served basis for fans to do with as they wish. All requests must be of the PG variety.

Asner, the curmudgeonly Emmy Award winner of “The Mary Tyler Moore Show” and “Lou Grant,” dreamed up the unusual fundraiser with his son Matt, who works for Autism Speaks.

“I think people will get a charge out of it,” says Asner, who is currently on Broadway in the play “Grace.” ”I’ll probably say, ‘What are you wearing?’ Or, ‘Take it off.’ Something like that.”

All proceeds will support autism research and advocacy efforts.

If he could get a message from one of the other stars participating, which would Asner want?

“I’m awfully stuck on Will Ferrell, having been subjected to him in ‘Elf,’” Asner says. “But they’re all such standouts — Patrick Stewart, Leonard Nimoy, Shatner. The list doesn’t stop. Even Betty White,” he adds about his “MTM” co-star. “She’s still got some good left in her.”

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In “beautiful China”, local polluters still hold sway

TIANYING, China (Reuters) – In ramshackle semi-industrial Tianying in China’s Anhui province, a state-owned lead smelter and foundry sits at the center of town, behind high walls and secure gates that make it look more like a prison than the mainstay of the local economy.

Decades of pollution from it and similar plants — Tianying once accounted for half of China’s total lead output — has made much of the town’s land uninhabitable and its water undrinkable.

In 2007, the Blacksmith Institute, a New York-based non-profit group that helps clean up polluted sites, included Tianying in its list of the world’s most polluted regions.

For China’s new leadership, reversing the environmental destruction wreaked by three decades of unrestrained economic growth is among its highest priorities. Across the country, to the government‘s alarm, social unrest spurred by environmental complaints has become increasingly common.

In a pledge taken up by the new leadership, outgoing President Hu Jintao said in his address to the Communist Party Congress earlier this month that the country had to “reverse the trend of ecological deterioration and build a beautiful China”.

Environment minister Zhou Shengxian reinforced the pledge at a briefing in Beijing last week, saying China needed to “quickly change the current situation in which too much emphasis is put on economic growth and too little on environmental protection”.

Tianying, in the northwest of poor and landlocked Anhui, will test that commitment.

Here, like hundreds of other blackspots from the stripmined cities of the northeast to the mercury contaminated fields in the southwest, the local government is intimately entwined with the most powerful economic interests in town.

“LEAD BOSSES”

In Tianying the government and the town’s largest employer are all but indistinguishable: the Jiaxin Group, owner of the main foundry at the center of town, is a state-owned company.

Unsurprisingly, amidst the town’s dwindling population of around 100,000, the words “beautiful China” elicit skepticism.

“I heard the central government is going to protect the environment more, but it won’t happen here,” said Zhang Weimin, a 58-year-old resident who lives a mile from the smelter. “I don’t trust the local government or the public security bureau or the lead factory bosses.”

Fear of the local authorities is palpable. Many residents were reluctant even to be seen near Reuters correspondents during a recent visit, saying they would be punished by the “lead bosses” as well as the police.

Asked about the state of local water supplies, a worker standing outside the factory gates grinned nervously and muttered “go see for yourself”.

China’s richer, coastal regions have improved environmental conditions over the last 10 years, driven as much by the profit motive as by tougher regulation. Rehabilitated land in Beijing or Shanghai can be turned into lucrative real estate.

But Beijing has struggled to provide the incentives for poorer regions like Anhui to clean up.

“The places I worry about in China are no longer the large wealthy metropolises but the small township and village enterprises – a lot of those are ignored and highly polluting and toxic to the very poorest communities,” said Richard Fuller, the Blacksmith Institute’s founder and president.

ALGAE AND SLUDGE

Tianying today is not as polluted as it was a decade ago. A 2002 study showed lead concentrations were as much as 10 times higher than national standards and children had suffered “adverse effects” as a result of prolonged exposure to the metal, which is especially damaging to children as it can impede learning and affect behavior.

Regulators by then had identified it as a blackspot urgently in need of remedy. The worst small-scale smelters and recycling workshops were shut, and production was left to large state firms like the Jiaxin Group.

Local authorities have also set up a wetland preserve nearby and forced the town’s remaining farmers to vacate land around the factories, replacing pasture with rows of fragile saplings.

The perimeter of the main Jiaxin plant is marked by signs urging residents not to drink water within an 800-metre radius, but even a mile away the risks do not appear to have abated. Some irrigation streams were clogged with algae — the result of fertilizer use — but others were filled with sludge.

“If you look you will see it – they are all black, nothing can grow in them and nothing can live in them,” said Zhang.

As China’s top leaders pound the “beautiful China” rhetorical drum, richer cities have already been forcing big polluters to clean up or relocate. Along the richer east coast, big polluting industries have come under growing pressure from urban residents now willing to fight for a better environment.

Demonstrations against chemical plants or garbage incinerators have erupted across China, from Dalian in the northeast to Xiamen in the southeast.

“You’ve got the local population becoming a lot more aware of environmental issues as they affect them on a day-to-day basis, and that isn’t going to go away,” said James Pearson, founder of Pacific Risk Advisors, which advises investors on potential environmental risks.

“HERE, NO ONE DARES TO PROTEST”

The protests have had an impact on government policy. Environment minister Zhou said last week that local residents needed to be consulted and new projects would now be forced to conduct “social impact assessments” before being approved.

But while the new procedures might help allay the “NIMBY” (Not In My Backyard) fears of affluent urban residents, they will not address longstanding problems like those in Tianying. Despite encouraging words from the central government, standing up to the polluters is not an option, residents said.

“Here, no one dares to protest – we would end up in jail because the lead bosses are protected by the police,” said an elderly resident standing at a kiosk a mile away from the plant.

The interests of the local government are now more aligned with the lead producers than they were a decade ago. Then, as part of the clean-up effort, lead production was taken out of private hands and passed to bigger state enterprises.

That has caused considerable resentment among residents. While pollution has been cut, the surviving plants and local authorities have had little incentive to clean up further, or to rehabilitate ruined land and water supplies.

“That is where they need to spend some serious cash — China has so far been focusing all its efforts on land that is worth selling when it is cleaned up,” Fuller of the Blacksmith Institute said.

Local resident Zhang said little would change under China’s new leaders as long as local industries and the governments that protect them continue to hold sway.

“If Wen Jiabao or Xi Jinping came here now I would certainly tell them what’s going on,” referring to the outgoing premier and anointed president-in-waiting. “But I wouldn’t trust anyone else.”

(Editing by Alex Richardson)

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Twinkies liquidation is approved

21 November 2012 Last updated at 16:27 ET

A US bankruptcy judge has given the go-ahead for the liquidation of Hostess Brands, owner of some of the country’s best known food brands, including cream-filled sponge snack Twinkies.

The hearing was delayed from Monday to allow for last-ditch talks with unions, but those failed.

As a first step in the liquidation of the company, Hostess is expected to lay off about 15,000 of its employees.

But Hostess’ advisers are confident that parts of the business can be sold.

In a statement, the company blamed the need for liquidation on a strike by the Bakery, Confectionery, Tobacco and Grain Millers (BCTGM) union, which started on 9 November.

Hostess Brands had sought protection from its creditors through Chapter 11 bankruptcy in January, but said it could not afford to continue operating through a strike.

The BCTGM blamed the company’s problems on years of mismanagement and being saddled with debt by private equity owners.

But Hostess said: “The wind-down was necessitated by an inflated cost structure that put the company at a profound competitive disadvantage”, adding that the main problem was its collective bargaining agreements with its staff.

‘Iconic brands’

One of the firm’s lawyers said there had been a “flood of enquiries” about buying some of the brands.

Advisers to Hostess Brands said they had been showing a potential buyer for the Drake’s cakes brand around the factory in New Jersey on Tuesday.

“These are iconic brands that people love,” said Joshua Scherer from Perella Weinberg Partners.

Hostess expects to keep on about 3,200 staff to help shut down its properties, but only about 200 of them are likely to still be employed at the firm by the end of March.

Hostess said the liquidation would mean the closure of 33 bakeries, 565 distribution centres, approximately 5,500 delivery routes and 570 bakery outlet stores.

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Ivory Coast: New prime minister named

ABIDJAN, Ivory Coast (AP) — President Alassane Ouattara has tapped Foreign Minister Daniel Kablan Duncan to serve as prime minister in a new government one week after the surprise dissolution of cabinet.

The appointment of Duncan, a member of the PDCI party of former President Henri Konan Bedie, was announced at a press conference Wednesday by Amadou Gon Coulibaly, general secretary of the presidency.

Ouattara dissolved the cabinet last week over a feud between his political party and the PDCI over proposed changes to the country’s marriage law.

The PDCI supported Ouattara in the November 2010 runoff election in exchange for the prime minister’s post, helping him defeat incumbent President Laurent Gbagbo. Gbagbo’s refusal to cede office led to five months of violence that claimed at least 3,000 lives before Ouattara’s forces won.

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Tablets, discounters top U.S. holiday shopping lists: Reuters/Ipsos

(Reuters) – Move over computers, your sleek siblings are the prized gift of the holidays.

One-third of U.S. consumers are thinking about buying an electronic tablet this holiday season, according to a new Ipsos poll conducted for Thomson Reuters. And 22 percent of those who want one of the hot devices said they plan to cut back on other holiday purchases in order to afford them.

But the new, smaller tablet from industry leader Apple Inc – the iPad mini – is not taking the world by storm. Only 8 percent named the iPad mini as their first choice, the same percentage that said they would like to buy a Microsoft Corp Surface tablet.

“There has been a lot of controversy about the fact that the iPad mini is $ 329, that the price might not be right,” said Jharonne Martis, director of consumer research for Thomson Reuters.

Still, Apple’s full-size iPad remains the leader, with 25 percent picking it as the tablet of choice while 15 percent want to buy Amazon.com Inc’s Kindle Fire, and another 15 percent want a Samsung Galaxy device.

Apple sold about 11 million iPads during the 2011 holiday quarter, and this year analysts expect it to sell about 16 million iPads and 8 million iPad mini tablets, Martis said.

Retailers have prepared for a big tablet season. Walmart, for example, doubled its orders for iPads and other tablets and will offer an iPad 2 with a $ 75 gift card for $ 399 as one of its specials on Thanksgiving night.

Laptops are still on the wish lists for 32 percent of respondents, while 18 percent would like to buy desktop computers and only 13 percent are looking for ultrabooks.

SPENDING LESS OR STILL UNSURE

Meanwhile, retailers may want shoppers to believe the holiday shopping season begins sometime in September. But the poll shows that most consumers still are waiting until around Thanksgiving to start their holiday shopping.

Walmart, Toys R Us and others started promoting their layaway plans in September as a way to reserve hot items.

While 11 percent said they were using layaway more this year than last year, 71 percent said they were not.

Seventy-two percent have done no shopping yet or less than a quarter of it, the poll found.

“The fact that 72 percent haven’t really started yet reinforces why Black Friday is coined the official beginning of the holiday season because that’s truly when shoppers start to open their wallets,” Martis said.

Most of that shopping will still take place in stores, despite the rise of online shopping and fears of shoppers using physical stores as showrooms for products they will buy online using their mobile devices.

“It is still growing, but it is still a very small portion of retail sales,” Martis said of mobile shopping.

Going to a mix of different types of stores is the plan for 42 percent of the respondents planning to go to stores, while 31 percent plan to do most of their holiday shopping at a discount chain such as Walmart, Target or Kmart, which will all be open for at least some of Thanksgiving Day to court shoppers.

The U.S. economy and possible tax hikes continue to be a concern for some, with 28 percent saying that they are spending less this year because of the fiscal cliff, though 58 percent said the fiscal cliff was not affecting their holiday spending plans.

Two-thirds of shoppers said they were planning to spend the same amount as last year or were unsure about their spending plans, while 21 percent plan to spend less and 11 percent plan to spend more. Also, 60 percent said are choosing to shop closer to home to save on gas.

Contrary to the cry of some traditional retailers, “show rooming” is not the norm for most people.

When asked how, if at all, they use a mobile device while in stores, 63 percent said they do not even pull out their smartphones while shopping. Fifteen percent compare prices online and 14 percent said they research products.

Amazon is the top online retailer shoppers plan to visit more than they did last year, with 42 percent picking it, 38 percent choosing Walmart, 23 percent selecting Target and 14 percent picking EBay.

Physical stores remain the top destination, with 26 percent planning to shop primarily at stores and only 14 percent planning to shop primarily online.

The poll is the first in a series that Ipsos will conduct during the holiday season.

The findings are from an Ipsos poll conducted for Thomson Reuters from November 15-19, 2012, with 1,169 American adults interviewed online. Results are within the poll’s credibility intervals, a tool used to account for statistical variation in Internet-based polling. The credibility interval was plus or minus 3.3 percentage points.

(Additional reporting by Brad Dorfman; Editing by Edward Tobin and Leslie Gevirtz)

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“Secret Disco Revolution” Gets U.S. Release

LOS ANGELES (TheWrap.com) – Screen Media Films has acquired U.S. theatrical rights to the documentary “Secret Disco Revolution,” featuring interviews with many 70′s music icons, including Gloria Gaynor, The Village People, and Kool and the Gang.

ScreenMedia plans a June 2013 U.S. theatrical run of the documentary, the company announced Monday.

Written, directed, and produced by Kastner, the film looks into the disco movement and many of its key figures.

“For anyone that grew up with disco this film will transport you back in time while filling in the blanks to what you didn’t even realize was happening around you,” said Suzanne Blech, president of Screen Media Films.

“If you weren’t around at the time to get caught up in the disco craze, the music and the moves will make you want to get up and dance,” Blech said.

Entertainment One Films International (eOne) has also sold the film to a number of other territories, including Japan (Kadokawa), Italy (Sky Arts) and Germany, Austria, Switzerland and France, all through ZDF Arte.

The Screen Media deal was negotiated by Blech and Charlotte Mickie from eOne, along with Andrew Herwitz from The Film Sales Company, on behalf of the filmmakers.

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Pfizer, Bristol get EU nod for blood clot preventer

(Reuters) – European health regulators on Tuesday approved an eagerly anticipated blood thinner developed by Bristol-Myers Squibb Co and Pfizer Inc for preventing strokes and blood clots in patients with an irregular heartbeat known as atrial fibrillation, the companies said.

The drug Eliquis, also known as apixaban, is widely considered one of the most important new products for the two U.S. drugmakers, with multibillion-dollar annual sales potential.

The European approval was expected after an advisory panel this year recommended it for atrial fibrillation.

“It’s not unexpected, but it’s positive to finally get an afib approval under the belt for Eliquis,” said MKM Partners analyst Jon Lecroy, who sees annual sales reaching $ 2 billion by about 2017. “We’re looking for a March approval or earlier in the U.S. for the same indication,” he added.

The U.S. Food and Drug Administration is expected to decide on the proposed use of the drug in the world’s biggest market by March 17, after delaying a decision in June to review more information from clinical trials.

The European Commission approval marks the first regulatory approval for Eliquis for stroke prevention in atrial fibrillation patients in any market, the companies said.

Eliquis belongs to a new class of medicines designed to replace decades old warfarin for preventing blood clots in heart patients and after hip or knee replacement surgery.

It already was approved in 27 European Union countries for prevention of certain blood clots called venous thromboembelisms following elective hip or knee replacement surgery.

But atrial fibrillation, which greatly raises the risk of strokes, is considered by far the largest and most important use for the new drugs, that include Xarelto from Bayer and Johnson & Johnson, and Pradaxa from privately held Boehringer Ingelheim.

Eliquis, like Xarelto, works by inhibiting a protein called Factor Xa that plays a critical role in blood clotting. Pradaxa has a slightly different mechanism of action.

About 6 million people in Europe and another 5.8 million in the United States suffer from atrial fibrillation, the most common form of heart arrhythmia, or irregular heartbeat.

In clinical trials, Eliquis demonstrated superiority over warfarin in reducing the risk of strokes, major bleeding and death.

Warfarin, widely used for more than half a century, is inexpensive and works well, but requires close and regular patient monitoring as well as lifestyle and dietary changes that are not necessary with the newer medicines.

“Patients with atrial fibrillation have a five times greater risk of stroke and there remains a critical public health need for improved treatment options to reduce this risk,” Lars Wallentin, director of cardiology at Uppsala Clinical Research Centre and University Hospital in Sweden, said in a statement.

He called Eliquis “an important new treatment option for health care professionals, who now have an oral anticoagulant with superior outcomes versus warfarin.”

Wall Street analysts have said that, based on clinical efficacy and safety data, they believe Eliquis will become the dominant player in an estimated $ 10 billion market for the new blood thinners once it receives U.S. approval.

Pfizer Chief Executive Ian Read, in a statement, said he believes Eliquis “has the potential to transform the standard of care in stroke prevention in nonvalvular atrial fibrillation”.

Pfizer shares were up 5 cents at $ 24.19 and Bristol-Myers shares were up 2 cents at $ 32.05, in afternoon trading on the New York Stock Exchange.

(Reporting by Bill Berkrot; Editing by Gerald E. McCormick, Tim Dobbyn and David Gregorio)

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Autonomy ‘misled HP on finances’

20 November 2012 Last updated at 14:58 ET

HP chief executive Meg Whitman: “We uncovered a whole host of very concerning accounting improprieties”

Computer maker Hewlett Packard has asked US and UK authorities to investigate alleged misrepresentations of Autonomy’s finances before HP took over the UK software group last year.

HP said Autonomy appeared to have “inflated” the value of the company prior to the takeover as part of a “wilful effort to mislead”.

This led to a $ 5bn (£3.1bn) charge in its latest quarterly accounts.

The former management team of Autonomy “flatly rejected” the allegations.

Three former senior members of staff, including former chief executive Mike Lynch, said they were “shocked” to see the statement.

“HP’s due diligence review was intensive,” Autonomy’s former chief executive, chief financial officer and chief operating officer said, referring to the process of investigating a firm prior to purchase.

“It took 10 years to build Autonomy’s industry-leading technology and it is sad to see how it has been mismanaged since its acquisition by HP,” the statement from the former management team said.

During a conference call following the announcement, HP chief executive Meg Whitman said: “We did a whole host of due diligence but when you’re lied to, it’s hard to find.

“[Autonomy] was smaller and less profitable that we had thought,” she said, adding that HP’s investigations suggested that the UK firm had misstated its revenues and growth rate.

Taking into account recent falls in HP’s share value and lower-than-anticipated returns from the merger, the total one-off charge recorded in HP’s accounts for the three months to the end of October was $ 8.8bn, pushing the company to a $ 6.85bn net loss.

‘Questionable accounting’

Continue reading the main story

HP’s allegations… are shocking if true – not least because for years Autonomy was regarded as that rarest and most precious of British companies, a global hi-tech success”

End Quote

HP said during the conference call that “a very senior person” from Autonomy had come forward “with specific details [of accounting misrepresentations]“. That person was still at the company, it said.

Ms Whitman said HP had discovered a number of irregularities, including hardware sales that had been reported as software revenues, which inflated both overall revenues and profit margins.

She said margins of between 40% and 45% had been reported, whereas HP now believed them to be between 20% and 28%.

As well as referring the matter to the regulatory authorities, the company would be “aggressively pursuing individuals responsible for this wrongdoing”, she added.

This would involve trying to recover money for HP shareholders.

HP shares fell 13% in early trading in New York following the announcement.

Deloitte, the accountancy firm which audited Autonomy’s accounts, said it could not comment on the allegations due to client confidentiality, but would cooperate with any investigations.

Criticism

HP completed the takeover of Autonomy for $ 12bn in October last year.

Autonomy was founded by Mike Lynch in 1996 and grew to become one of the largest software companies in the UK.

Mr Lynch is a non-executive director of the BBC, which said in a statement: “We expect to discuss these reports with Dr Lynch imminently.”

Autonomy gained a listing on the US Nasdaq exchange in May 2000, at the height of the technology boom, and was listed in London six months later.

The firm has often been cited as an example of how academic research can be turned into a profitable business, although it has attracted criticism from the City, particularly when, in October 2010, it warned there had been unexpected volatility in its customers’ “purchasing behaviour” and lowered its full-year forecasts.

HP’s decision to buy the company was part of the US firm’s long-term plan to move away from making computers into the more profitable software business.

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