I was both shocked and saddened to hear the news today that HP has accused Autonomy of effectively ‘cooking its books’ in the run up to their $11bn acquisition of the company in October 2011. HP is accusing Autonomy of “serious accounting improprieties” and “outright misrepresentations” and is seeking damages that will be substantial and the case will no doubt take years to reach a conclusion.

My first thought is how the hell could HP not notice something like this? That one of the largest companies in the world, with one of the most respected auditing companies by its side, conducting due diligence for a multi-million dollar transaction, could have missed this seems extraordinary to me. Questions should be asked of both sides. In recent years HP has lunged from one disaster to the next including multiple CEO and strategy changes that tell you the company has no idea where it is heading. HP has such a strong heritage and it has been sad to see it flailing around in this way.

When Symantec acquired MessageLabs I’ve seen first hand how difficult it is to integrate two businesses, especially when they were founded in different countries and have very different cultures. US companies have a tendency to be a bit of a blunt instrument in these situations and don’t necessarily take the time to understand the companies they are buying.

I wonder whether this is what is happening here. Perhaps Autonomy has done nothing wrong and it’s just that HP did not take the time to understand their business and how well it would dovetail with their own strategy. Maybe HP now realize that they simply overpaid for the business in some desperate attempt to patch up their more serious problems and are now throwing around these accusations as some kind of smokescreen.

My other thought is that this is the last thing that the UK’s technology industry needs as it tries to establish more solid foundations for the creation of companies that can compete on the global stage. Autonomy was the largest technology company in the UK (second largest in Europe) and a shining example to every entrepreneur of what’s possible. It was one of the few tech businesses to successfully IPO in the UK and went on to become the clear global leader in its market for unstructured data analysis employing thousands of people along the way.

I first met Mike Lynch, Autonomy’s founder and CEO, soon after we had founded MessageLabs in 2000. He immediately understood what we were doing to better identify viruses and was really interested in it. I felt completely out of my depth with the sense that we were in the presence of an enormous brain and thought that the UK’s tech scene needed more people like Mike. It didn’t surprise me that Autonomy went on to be so successful.

If the evidence shows that Autonomy are guilty of misrepresenting their numbers then the company’s position as a trailblazer for the European tech industry will be lost and the whole eco-system will suffer. The technology industry in the UK is growing, with London serving as its main hub, and represents one of the few bright spots in the economy. If Autonomy is proved to be flawed in this way, it will have an impact across the industry and people will stop and think a little more before investing in it.

I hope the accusations prove to be unfounded and that Autonomy manages to recover its reputation as a highly respected UK success story. Unfortunately, we will most probably not get an answer to this for several years.