Starboard Value, an activist investor, demands that Autodesk provide a clear explanation of their accounting and financial issues.

• Starboard Value, an activist investor, wrote a letter to Autodesk's board requesting greater transparency and responsibility regarding an internal investigation that resulted in the reassigning of the company's CFO.
• The company's largest shareholder, Starboard, with a stake worth more than $500 million, stated that it was "insanity" that shareholders were not informed about the executives involved in misleading investors about the company's free cash flow numbers.
• Either Autodesk executives withheld the truth from the board and should be dismissed, or Autodesk's board was aware of the financial misreporting and should resign.

Starboard Value, an activist investor, sent a letter to the board on Tuesday, demanding an explanation of the internal financial probe that led to federal investigations and the revelation of deliberate misrepresentation of key financial metrics.

The activist investor's letter, which was seen by CNBC, stated that there were "no consequences and no accountability for those responsible for misleading shareholders intentionally."

Autodesk delayed its annual reporting by more than a month after the probe concluded due to the lack of explanation regarding the executives responsible for the financial misrepresentation, as stated by Jeff Smith, the starboard managing member.

Autodesk's internal investigation revealed that executives had changed course on a widely publicized change in customer charging after realizing the company would not achieve its 2023 free cash flow target. The investigation resulted in the reassignment of the CFO and triggered inquiries from financial regulators and the Justice Department.

Autodesk's CFO is not the only executive who was involved in misleading investors, according to Starboard, which believes that the company has not done enough to address shareholder concerns about the probe that caused Autodesk shares to drop 20%.

An activist with a more than $500 million stake in Autodesk sent a letter after a Delaware judge blocked its attempt to postpone the software company's annual meeting and launch a proxy battle.

Smith wrote in the letter that it was almost impossible to believe that there were not more members of management and potentially the Board who were aware of the billing issues. He went on to suggest that either Autodesk executives had deliberately withheld the billing reversal from the board or the board had been made aware of the shifted plans.

If an executive cannot be trusted by the Board, they should no longer remain employed by the Company, as seen in the case of former CFO Debbie Clifford, who was moved to a new role as chief strategy officer after the probe's findings were announced.

"If management was transparent with the Board and some members had knowledge of the misleading disclosure at the time it occurred, Starboard suggested that those board members should resign immediately."

Autodesk's perceived "poor corporate governance" has led to frustration among investors, and Starboard believes that the company spends too much on sales and marketing compared to its peers. The activist has received "overwhelmingly positive feedback" from other investors who believe that genuine improvements in operating margin would drive increased investor confidence and close the company's discount to its peers.

Smith urged the Board to be transparent with shareholders about the misdeeds that occurred and to disclose all those responsible, in order to rebuild shareholders' trust and confidence.

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