Lynch. (The Telegraph)

Ever since Hewlett-Packard delivered its bombshell allegations against Autonomy, the search engine maker that HP acquired for $11.1 billion last year, the dispute between the sides has fallen into a holding pattern: Autonomy founder Mike Lynch speaks, and HP doesn't.

To refresh your memory, HP said it was taking an $8.8 billion write-down on the value of Autonomy when the Silicon Valley giant announced third-quarter results on November 20. The reason for the massive loss on the newly acquired company? According to HP, accounting shenanigans at Autonomy led to an inflated valuation.

Autonomy founder Mike Lynch has been far more talkative. Since the day HP went public with its claims, Mr. Lynch has taken to a variety of platforms to deny charges that his company cooked the books, wonder aloud whether HP had targeted his old company as a means of distracting investors from disappointing results, and tell anyone who would listen that he'd yet to hear word number-one from HP regarding the allegations.

Today, the Autonomy founder told Bloomberg that he's yet to hear anything from HP regarding the crooked accounting claims, noting that he was initially informed of the allegations via text message.“We haven’t heard anything from anybody,” he told Bloomberg. “It’s a very strange way of doing things, but we’d love to hear more.”

Also: “Meg is so off of my Christmas card list this year,” he said.

Ms. Whitman. (Photo: Max Morse)

The nuts and bolts of HP's $11.1 billion acquisition of Autonomy are pretty wonky. But we know a good scandal when we see one, and this $8.8 billion loss and the whole "fraud" debacle are shaking up to be one for the record books.

After losing all that money, HP pointed the finger at its subsidiary, alleging that cooked books had made Autonomy appear more valuable than it really was. If the HP thought the former Autonomy team would go quietly into that good night, the Silicon Valley giant was sadley mistaken. Former Autonomy CEO Mike Lynch has loudly maintained his innocence, and now Business Insider reports that he's started a blog to defend against the allegations.

The description:

This website is maintained by Dr Mike Lynch on behalf of the former management team of Autonomy. The site provides relevant information pertaining to the accusations made by Hewlett Packard (HP) on 20 November 2012 of financial impropriety at Autonomy. The former management team of Autonomy strongly rejects the accusations made by HP.

Thus far the blog is mostly placeholder, with an open letter to HP board dated November 27, an Autonomy timeline and the lengthiest legal notice we've ever seen outside of an iTunes terms of service agreement. But we're adding it to our RSS feed and waiting for the other shoe to drop.

It's tough to say who to believe here, but one thing is for sure: This is just the latest chapter in the sad, sorry history of corporate scandals at Hewlett-Packard, a company's had its dirty laundry aired over and over again in the most public of possible arenas. The company has had, count 'em, seven CEOs since 1999. CEO Meg Whitman was supposed to be a clean break with a past involving rampant leaks to the press, sexual harassment and gross infighting on the company's board of directors.

Guess that's not working out so well.

Lynch. (The Telegraph)

In the hours since Hewlett-Packard stunned investors by announcing an $8.8 billion loss on its acquisition of Autonomy, competing narratives have emerged to describe just what went wrong.

H-P spoke first, explaining that "accounting improprieties" and "outright misrepresentations" committed before it acquired the British search engine maker for $11.1 billion last year led to today's write-down. Former Autonomy CEO Mike Lynch said that the deal was vetted by a small army of accountants and bankers, and that internal problems at the Silicon Valley giant are responsible for Autonomy's troubles.

Which one should you believe? Betabeat breaks it down.

What H-P said

In H-P 's telling, it agreed to pay too much for the British search engine maker back in August 2011, back when, ahem, the Silicon Valley giant was helmed by an executive, former CEO Leo Apotheker, who is no longer with the company. In that version, the little matter of "a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers" caused H-P to overvalue the company.

The claim that "certain employees" of Autonomy defrauded H-P and its shareholders is no small charge (and $8.8 billion isn't a small amount); CEO Meg Whitman promised to raise the hounds—U.S. and U.K. regulators, anyway—to make sure that the perpetrators of the apparent fraud are punished, and to pursue civil litigation against the people responsible for the fraud.

The Autonomy story

Former Autonomy CEO Mr. Lynch wasn't named anywhere in H-P's statement, but he's responded like a man on public trial, stressing to The Wall Street Journal that the deal went through a "meticulous" vetting process overseen by hundreds of auditors and bankers, then taking note that the H-P's announcement was "coincident with them releasing the worst set of results in their 70-year company history."

That wasn't all: Mr. Lynch stayed available, repeating his story ("it's completely and utterly wrong") to reporters from various outlets, and arguing that H-P abandoned Autonomy after Mr. Apotheker was forced out of the company and the software maker lost ground amid "petty infighting."

As far as which narrative to believe, at some point the proof will be in the pudding—H-P is said to have discovered the "accounting improprieties" (such a dainty way to explain away an $8.8 billion loss!) after an Autonomy executive blew the whistle, and we expect regulators and plaintiff's attorneys alike will be working hard to put some meat on the bones of H-P's claims.

The third party

In the meantime, it's worth noting that Jim Chanos, the Kynikos Associates hedge fund manager known for betting against Enron, seems to have been onto Autonomy for a while. Per Bloomberg:

Chanos, speaking at an investor conference in July, said Autonomy’s accounting was “dreadful,” and that Hewlett-Packard “did almost no due diligence” before acquiring the company. Chanos oversees $6 billion at Kynikos Associates Ltd.

And if we had to stake our life on the word of an army of faceless accountants pushing paper around under pressure from their client to complete a deal, or the conviction of a billionaire short-seller with skin in the game, we'd feel a lot safer going with the latter.