HP: 'Autonomy's Mike Lynch committed fraud'

It's been three years since the company bought Autonomy, but the battle between HP and its founder has finally come to a head.

by Emma Haslett
Last Updated: 02 Oct 2015

Things just got real in the battle between HP and Mike Lynch: the company has filed court documents accusing the founder and CFO of Autonomy of accounting fraud. It’s a big moment – although the two sides have been bickering vociferously for the past couple of years, no one’s out-and-out accused Lynch and his CFO Sushovan Hussain of criminal activity.
 
To recap: HP acquired software company Autonomy, at the time one of the darlings of the UK tech scene, in August 2011 for $11.7bn (£7.1bn), the largest-ever acquisition of a British technology company. In May the following year, Lynch quit, ostensibly because Autonomy wasn’t making enough money.

Then in November 2012, HP revealed that it had uncovered inconsistencies in the books, which resulted in an $8.8bn writedown on the deal. Since then, HP has accused Lynch of tricking it into the deal, while Lynch insists it knew everything.

HP has taken a lot of the flack for this so far. It was sued by its own shareholders, but tried to settle in April. Then Hussain moved to block the settlement, saying HP was denying access to evidence, covering up its own behaviour in the process. Now HP has clearly hit back against that attempt, calling Hussain ‘ludicrous’.

In court documents, HP called Hussain a ‘fraudster’ who ‘wraps himself in a mantle of self righteousness in an attempt to obtain discovery that he hopes will help him stay out of prison’, adding that both he and Lynch ‘should be held accountable for the fraud’.

Lynch gave as good as he got: ‘This breathless ranting from HP is the sort of personal smear we’ve come to expect,’ said a spokesperson.

‘As the emotional outbursts go up, the access to facts seems to go down. HP has struck a corrupt and collusive settlement to try to bury the truth rather than face a court. [CEO] Meg Whitman is buying off a bunch of lawyers so she doesn’t have to answer the charges of incompetence and misdirection in front of a judge and jury.’

There we were thinking the furore had blown over. Brace yourself for more fireworks – on both sides of the Atlantic...

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