HP CEO asked to explain stock sale
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The congressional panel investigating Hewlett-Packard’s boardroom spying probe on Wednesday demanded that Mark Hurd, chief executive, explain a $1.37m stock sale he made just days before news of the scandal became public.
In a letter dated December 12, two Democratic members of the House Energy and Commerce Committee, Rep John Dingell and Rep Bart Stupak, said it appeared that Mr Hurd had voluntarily cashed in $1.37m in stock options on August 25. That is the same day Mr Hurd was questioned by HP’s outside attorneys, who were condcting an investigation into the scandal.
The letter asked Mr Hurd to confirm the date and explain the alleged stock sale. It said the sale did “not appear to be a part of any prescheduled programme” of share disposals.
“Continuing revelations about widespread ‘backdating’ and ‘spring-loading’ abuses have raised questions about whether executives are cashing in (’bullet dodging’) while in posession of potentially damaging material facts that shareholders do not know,” it said.
HP said it had received the letter and that it would respond to the inquiry.
HP’s shares were mostly unaffected in the weeks after the company admitted its detectives had spied on board members, journalists and their families in order to uncover the source of a boardroom leak.
The investigation’s dubious tactics, which included the potentially fraudulent acquisition of telephone records and physical surveillance, sparked a furore that claimed the jobs of Patricia Dunn, HP’s former chairman, and several other HP officials. Ms Dunn and four others are facing criminal charges including identity theft for their role in the scandal. All five pleaded not guilty.
Last week, HP announced that it would pay $14.5m to settle any civil complaints brought by the state of California in connection with the case. The company remains under investigation by federal authorities including the US Justice Department. It is also facing shareholder lawsuits.
Wednesday’s news came as HP announced a three-year partnership with Microsoft, the world’s biggest software maker. Under the deal, HP and Microsoft will invest $300m to develop new products and services for business communciations, content management and other areas where their businesses overlap. The partnership will cover product development, testing and marketing.
HP’s shares fell 0.4 per cent to close at $39.67 on Wednesday.