If Shane Robison had any misgivings at the Galway Races in September 2004, he certainly wasn't showing it. Robison, a rising star in Hewlett-Packard, presented the Galway Plate and a cheque for €103,725 to Kay Devlin, owner of the Dermot Weld-trained Ansar.

While HP was keen to enhance its positive image in Ireland, Robison, the company's executive vice-president and chief strategy and technology officer, was unwittingly being drawn into a massive corporate scandal that this week led to the resignation of the company's chairwoman, Patricia Dunn.

Dunn announced on Tuesday that she would step aside amid a tale of intrigue that includes HP's spying on the phone records of board members and journalists.

While Robison was enjoying the Galway Races, HP board member Thomas Perkins, the biggest venture capitalist in Silicon Valley, was pushing for drastic change. He believed HP was underperforming and was facing competition from Dell and others. This led to tension between Perkins and then chief executive Carly Fiorina, who Perkins believed had performed poorly since HP's uneasy merger with Compaq in 2002.

The dispute came to crisis between January 12th and 15th, 2005, at an annual board strategy meeting in San Francisco. Perkins and other board members urged Fiorina to give more power to Robison, as well as two other executives, Vyomesh "VJ" Joshi, head of HP's printing and personal computing division, and Ann Livermore, head of services and enterprise computing.

Details of the meeting were to remain secret so as not to rattle investors, but they ended up in an article in the Wall Street Journal. The information could only have come from someone at the meeting. Tech lawyer Larry Sonsini investigated the leak but it was too late for Fiorina, who was fired in February and replaced by Mark Hurd.

Patricia Dunn, a second generation Irish American, was appointed as non-executive chairwoman. Since her appointment, she became obsessed with finding the leaker, fearing similar leaks could weaken her position.

She hired an external firm to investigate and now claims she was unaware it was using "pretexting" - a system in which the investigator calls phone companies to get phone records by pretending to be the owner of the number to which they relate.

As the covert investigation continued, HP reached a second leaking crisis in January 2006 when the board met for a strategy meeting at the Esmeralda resort and spa in California. An article on CNET News, quoting a source at the meeting, revealed that HP was considering dropping Intel's troubled Itanium chip.

Intel had launched the chip four years previously while announcing it would expand its manufacturing facility in Leixlip, Co Kildare, where HP also has a substantial operation.

The article claimed HP was "frustrated" by Intel delays and was considering switched to Advanced Micro Devices (AMD) "as a cattle prod of sorts" to Intel.

The article was embarrassing for HP, especially when it had to explain it to its neighbour Intel.

After HP's external investigators trawled through phone records of suspect board members, they found a pattern of calls leading from George Keyworth, the longest-serving HP director, to prominent journalists.

At a board meeting at HP headquarters in Palo Alto, California, on May 18th last, Dunn and Verizon executive Lawrence Babbio confronted Keyworth and called for his resignation.

Venture capitalist Thomas Perkins, a friend of Keyworth, was outraged that Dunn had spied and quit the board in protest. He got a call from a HP lawyer who discussed the reasons for his departure. According to Perkins, it was a trap - discussion with a lawyer about reasons for leaving a board does not have to be included in filings to the regulator, the Securities and Exchange Commission (SEC), due to legal confidentiality rules.

However, HP knew the end was coming when Perkins formally asked the SEC to investigate his departure and why it had not been disclosed by HP.

On September 6th last, HP lawyers, fearing SEC action, admitted the company used an external "consultant" to mislead phone companies into providing private phone records of board members and journalists.

The next day, California attorney general Bill Lockyer announced that the spying had broken two state laws and that he would continue to investigate.

After crisis meetings, Dunn accepted that she could no longer stay on as chairwoman but maintains she didn't know her spies were doing anything illegal. She is to step down in January.

While not wanting my phone records seized, I spoke to someone in HP familiar with the case. "Bad news," he said. "Now, I have to hang up."