California-based HP chairman Patricia Dunn will step down in January after a privacy scandal.
Dunn`s resignation follows an investigation into board level leaks in which a subcontractor investigating on HP`s behalf obtained phone records through misrepresentation, or using a technique known as 'pretexting`.
Wim Mostert, an attorney and director at Mostert Opperman Goodburn, says pretexting, or obtaining access to private records through the telephone company by pretending that you are the client, amounts to a criminal act of fraud under South African common law.
"The private investigators who represent themselves as employees to the telephone companies may face criminal charges both from the employee, as well as the telecoms company."
Mostert says directors who were party to, or aware of, the offence by the investigators could also be prosecuted. "Courts have a discretion to dismiss private phone records as evidence if the employer obtained them by pretexting or otherwise in breach of the employee`s right to privacy."
HP announced yesterday that Dunn would keep her position as chairman until the company`s 18 January 2007 board meeting. CEO Mark Hurd will then replace Dunn. However, the chairman, embroiled in a scandal over an investigation into fellow board members over a media leak, will remain on the board as a director.
Wave of criticism
Dunn`s resignation follows a tidal wave of criticism over her effort to find out who leaked information about corporate board meetings to reporters, and the tactics used by investigators, reports Reuters.
The wire service says Dunn, 53, defended her decision to root out the source of board leaks, but said the investigation included certain "inappropriate techniques".
The boardroom leaks she tried to trace dated back to around the time HP ousted Carly Fiorina as chairman and CEO in 2005, reports Reuters.
The California attorney general is probing whether the methods used by the private investigators Dunn hired broke any laws. Federal prosecutors have requested information about the probe, in which investigators posed as board members and journalists, the wire service said.
In a statement released by the company, Dunn said: "The recent events that have taken place follow an important investigation that was required after the board sought to resolve the persistent disclosure of confidential information from within its ranks.
"These leaks had the potential to affect not only the stock price of HP, but also that of other publicly traded companies. Unfortunately, the investigation, which was conducted with third parties, included certain inappropriate techniques.
"These went beyond what we understood them to be, and I apologise that they were employed."
Hurd said: "I am taking action to ensure that inappropriate investigative techniques will not be employed again. They have no place in HP.
"HP holds itself to the highest standards of business conduct and we are accountable to these standards for everything that we do. The company will work to put these matters behind us so that we fully resume our focus on the business and continue to earn the trust and support of our customers, employees and stockholders."
Share
