Starboard presses for changes at Autodesk after accounting probe

(Reuters) -Activist investor Starboard Value is seeking operational and governance changes at Autodesk after losing a bid to appoint its nominees to the design software firm's board ahead of its annual meeting next month.

Starboard said in a letter on Tuesday that Autodesk was maintaining a misleading "all is well" narrative and had dented investor trust with a "wholly inadequate response" to an accounting issue it disclosed recently.

The letter comes after Autodesk said there would be no reinstatement of its financial statements after a months-long probe it conducted into certain accounting practices, which had delayed the annual report and hit its share price.

Autodesk disclosed in May that, to meet free cash flow targets, it continued entering into multi-year, upfront contracts with enterprise customers through 2023 despite previously announcing a transition to annual billings a year earlier.

The company's sales grew at a six-year low of about 10% in the last fiscal year.

Starboard said the management at Autodesk, which provides 3D design and engineering solutions for several sectors, including construction, manufacturing and media, had "intentionally" misled investors.

It accused Autodesk of "subpar operational and financial performance", while identifying significant cost reduction opportunities.

Shares of Autodesk are down 30% since their peak in August 2021.

The company has offered to work with Starboard on its concerns and continues to engage with its shareholders, an Autodesk spokesperson said.

Autodesk appointed board member Elizabeth Rafael as its interim finance chief, replacing Debbie Clifford, who was moved to the role of strategy head.

Starboard, which revealed an over $500 million stake in Autodesk earlier this month, has also managed activist campaigns at Salesforce, Wix.com and GoDaddy.

The New York-based investment adviser had unsuccessfully sued Autodesk to delay its annual general meeting, set for July 16, and reopen its director nomination window, which closed in March.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Tasim Zahid and Shinjini Ganguli)