There has been yet another twist in the seemingly never-ending saga that is Hewlett-Packard’s bust-up with Mike Lynch. After the ageing American computer giant accused him of multi-billion dollar fraud, the former Autonomy boss has decided to sue for $150m (£99m) worth of reputation damage.
It’s a battle that’s been raging for three years now. HP, which announced in September it was cutting around 33,000 jobs, bought the FTSE 100 software company for $11.7bn in 2011. A little more than a year later it wrote the value of its acquisition down by a staggering $8.8bn.
Then last summer it accused Lynch and Autonomy’s chief financial officer Sushovan Hussain of accounting fraud and, in March this year, filed a claim for $5.1bn of damages from Lynch and Hussain in the UK high court. Now Lynch, who told MT back in 2013 he was ‘absolutely happy with the accounting at Autonomy’, has finally hit back with a previously promised claim of his own.
‘Dr Lynch has suffered significant reputational damage and been unable to pursue business opportunities available to him following his departure from Autonomy,’ documents lodged at the High Court yesterday said.
‘Over the past three years, HP has made many statements that were highly damaging to me and misleading to the stock market,’ Lynch said in a separate statement. ‘Worse – HP knew, or should have known, these statements were false.’
‘HP’s own documents, which the court will see, make clear that HP was simply incompetent in its operation of Autonomy, and the acquisition was doomed from the very beginning,’ he continued. ‘[HP CEO] Meg Whitman can explain all this to a judge when we finish this in court once and for all.’
The documents allege HP’s chief financial officer privately calculated writing off the $7.6bn of ‘synergies’ it had forecast Autonomy would save them. However, it claims that was reduced to $2.3bn after Whitman queried it, with the rest attributed to fraud.
While the Serious Fraud Office closed its investigation in January, citing insufficient evidence, the FBI and Securities & Exchange Commission are believed to still be investigating the affair.
In a now predictable pattern, HP hit back. ‘Mike Lynch’s lawsuit is a laughable and desperate attempt to divert attention from the $5bn lawsuit HP has filed and the ongoing criminal investigation,’ a spokesperson said. ‘HP anxiously looks forward to the day Lynch and Hussain will be forced to answer for their actions in court.’
MT is rather anxious too if we’re honest - this whole tit-for-tat has been tedious for some time now. And while one can understand the need to fight on given the huge amounts of money involved, it would be better for the reputation – and sanity – of both sides if this saga were to come to a conclusion sooner rather than later.