HP has won a multibillion-dollar fraud case against one of the founders of UK enterprise software company Autonomy, which was acquired by the American tech giant in 2011 for $11 billion (£7.1 billion).
Mike Lynch, who co-founded Autonomy in 1996, had been accused of providing false statements to HP during the sale of the company in an effort to inflate Autonomy’s value. Lynch, on the other hand, argued that HP was making him a “scapegoat for what in reality is buyer’s remorse coupled with management failings”.
HP paid $11 billion for the firm back in 2011 and later announced an $8.8 billion write-down of its value.
On Friday, London’s High Court ruled that HP “substantially” won what is believed to be the biggest civil fraud trial in UK history. It also dismissed Lynch’s $125 million counterclaim against HP.
However, HP is unlikely to receive the $5 billion that it demanded in losses, with Judge Robert Hildyard ruling that the amount “will be determined in a later judgment”.
“I would anticipate that, although substantial, it will be considerably less than claimed,” he added.
The “unusually complex trial” took 93 days over a period of nine months, out of which 20 days were dedicated to cross-examining Lynch, and included “more than 28,000 documents” of evidence.
Lynch, who has also been involved in founding Darktrace and Cambridge Neurodynamics, is planning to appeal the ruling.
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The ruling came just a day before home secretary Priti Patel approved Lynch’s extradition to the US, where he could be facing a prison sentence of up to 20 years. In 2018, Autonomy’s chief financial officer Sushovan Hussain was convicted of wire fraud and jailed for five years for his role in the company’s sale to HP.
Lynch’s lawyer, Chris Morvillo stated that Lynch “firmly denies the charges brought against him in the US and will continue to fight to establish his innocence”.
“He is a British citizen who ran a British company in Britain subject to British laws and rules and that is where the matter should be resolved. This is not the end of the battle – far from it. Dr Lynch will now file an appeal to the High Court in London,” he added.
