By admin
After years of wrangling, HP has won its civil fraud case against Autonomy founder and chief executive Mike Lynch. The ruling, the biggest civil fraud trial in UK history, came just hours before the UK home secretary approved Lynch’s extradition to the United States, where he faces further fraud charges.
The UK’s High Court found that HP had “substantially succeeded” in proving that Autonomy executives had fraudulently boosted the firm’s reported revenue, earnings, and value. HP paid $11 billion for the firm back in 2011 and later announced a $8.8 billion write-down of its value. In court, HP claimed damages of $5 billion, but the judge said the total amount due would be “considerably less” and announced at a later date. Kelwin Nicholls, Lynch’s lawyer and a partner at law firm Clifford Chance, said his client intends to appeal the High Court ruling. In a later statement, Nicholls said his client would also appeal the extradition order in the UK’s High Court.
This week’s events are the latest twist in an extradition process that began in November 2019, when the US Embassy in London submitted a request for Lynch to face trial in the United States on 17 counts, including wire fraud, conspiracy, and securities fraud. Lynch denies all charges against him. Nicholas Ryder, professor in financial crime at the University of the West of England describes it as the “Colt .45 for the US Department of Justice”—an all-pervasive and powerful move. “That’s their go-to charge. The ramifications for Mr. Lynch are significant.”
At the time of the Autonomy acquisition, HP’s then-chairman said he had “serious cold feet” about the deal, according to claims subsequently made in court. The company claimed some former members of Autonomy’s management team “used accounting improprieties, misrepresentations, and disclosure failures to inflate the underlying financial metrics of [Autonomy].” Among them was Lynch, then CEO of the firm.