NEW YORK – Hewlett-Packard Co. said a British company it bought for $9.7 billion last year lied about its finances, resulting in a massive writedown of the business’s value.

CEO Meg Whitman avoided calling it a fraud, but she said Tuesday that there were “serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC.”

HP is taking an $8.8 billion charge to align the accounting value of Autonomy with its real value. More than $5 billion is due to the false accounting, HP said.

The revelation is another blow for HP, which is struggling to reinvent itself as PC and printer sales shrink. Its shares hit a 10-year low in morning trading.

Among other things, Autonomy makes search engines that help companies find vital information stored across computer networks. Acquiring it was part of an attempt by HP to strengthen its portfolio of high-value products and services for corporations and government agencies.

The deal was greenlighted by Whitman’s predecessor, Leo Apotheker, but closed in October 2011, three weeks into Whitman’s tenure.

After HP bought the company, Autonomy’s reported results quickly declined. Autonomy CEO Mike Lynch continued to run the company as part of HP, but Whitman forced him out in May because it was not living up to expectations.

“Little did I know that there was more than met the eye,” she said.

After Lynch was gone, a senior Autonomy executive volunteered information about the accounting shenanigans, prompting an internal investigation, she said.

The case has been referred to the U.S. Securities and Exchange Commission and the UK’s Serious Fraud Office, she said. The company will also try to recoup some of the cash it paid for Autonomy through lawsuits.

Whitman said the two executives that should have been held responsible – Apotheker and strategy chief Shane Robinson – are gone. But the deal was also approved, essentially, by the current board.

“What I will say is that the board relied on audited financials,” Whitman said.

Apotheker said Tuesday that he was “stunned and disappointed” to learn of the allegations against Autonomy, and he pointed out that they had gone undiscovered by HP’s auditors, executives and directors.

Whitman said she still views Autonomy as a “growth engine for HP software,” albeit a weaker one than initially thought.