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Mike Lynch heads to High Court to defend against HP allegations
The UK’s biggest fraud case commences, with the former CEO of Autonomy, Mike Lynch, attempting to clear his name
Entrepreneur Mike Lynch, the former chief of Autonomy, is set to begin his High Court defence in London today, in a trial the BBC describes as the biggest fraud trial in the UK.
In November 2018, founder Lynch and former vice-president of finance Stephen Chamberlain were charged with fraud in the US over Autonomy’s sale to Hewlett-Packard (HP) in 2011.
According to Reuters, on 22 March 2019, prior to the start of the UK trial, a superseding indictment was filed against Lynch in the US for securities fraud, which carries a maximum prison sentence of 25 years.
In response, Lynch’s lawyers – Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson – issued the following statement: “Something is horribly amiss in San Francisco, where the Wild West “shoot first, ask questions later” approach to investigations – originally deployed by HP in this case – is sadly still alive and well.”
The legal wranglings stem back from HP’s 2011 acquisition of Autonomy for $11.7bn. In November 2012, HP wrote down the value of Autonomy by $8.8bn, proving the critics were correct in their analysis that HP had paid far too much for the software company.
As Computer Weekly has previously reported, this later led to a dispute with shareholders, who alleged that HP knew about Autonomy’s failings. In 2014, Lynch said: “It seems Meg Whitman [former CEO of HP] will be using a large sum of HP’s money to avoid explaining in court why she made false allegations regarding Autonomy in November 2012.”
In the UK, HP filed a claim against Lynch on 30 March 2015 for allegedly engaging in improper transactions and accounting practices. Lynch, in turn, issued a counterclaim against HP related to the significant reputational damage he has suffered following his departure from Autonomy. This is the trial that begun today in London’s High Court.
Read more about the Autonomy/HP case
2011: Hewlett-Packard (HP) completed its acquisition of software company Autonomy for £7.1bn. HP said the acquisition positioned it as a leader in the large and growing enterprise information management space.
2012: HP blames Autonomy for misleading the firm before acquisition and refers former management to the Serious Fraud Office.
2013: HP CEO Meg Whitman defended her company’s attack on the former management of Autonomy, which it acquired in 2011 for $11.7bn.
2014: HP was close to settling the legal dispute filed by shareholders over the acquisition of British software company Autonomy.
2014: HP sued Autonomy’s former chief financial officer, Sushovan Hussain, for his part in the 2011 acquisition of the UK software company.
2015: The UK Serious Fraud Office dropped its investigation into the sale of Autonomy to HP, but the US continued its investigation.
2018: Autonomy’s founder, Mike Lynch, and former vice-president of finance, Stephen Chamberlain, charged with fraud in the US.