Published: Mon, December 03, 2018
Finance | By Loren Pratt

Ex-Autonomy CEO Lynch charged with fraud tied to HP deal

Ex-Autonomy CEO Lynch charged with fraud tied to HP deal

Mr. Lynch consistently denied involvement, with his defence lawyers stating that the indictment "is a travesty of justice".

HP (now Hewlett Packard Enterprise) said it was "pleased" to see Lynch and Chamberlain facing charges. Lynch, 18-cr-00577, U.S. District Court, Northern District of California (San Francisco).

His lawyers added that HP had sought to "blame Autonomy for its own crippling errors" as well as "falsely accused Mike Lynch to cover its own tracks". "He has done nothing wrong and will vigorously defend the charges against him", they added, saying the claims amounted to a business dispute over the application of United Kingdom accounting standards. HP has previously claimed that it paid more money than it should have in that deal as a result of "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy".

The Department of Justice said Lynch and Chamberlain engaged in a scheme to deceive HP about Autonomy's financial condition and its prospects for growth by, among other things, providing HP with materially false and misleading quarterly and annual financial statements during the negotiations between the two companies.

"There was no conspiracy at Autonomy and no fraud against HP for the DoJ to take up", attorneys Chris Morvillo and Reid Weingarten said in an emailed statement.


Mike Lynch picture in 2010. HP has a long history of failed acquisitions.

His former finance chief, Sushovan Hussain, was found guilty in April of accounting fraud. The case is scheduled to be heard before the High Court in London in 2019. "He has done nothing wrong and will vigorously defend the charges against him", it said.

Earlier this year, the Financial Reporting Council began disciplinary proceedings against former bosses at Autonomy and auditors at Deloitte linked to the alleged fraud at the software firm. It is seeking $5 billion in damages against Lynch and Hussein in a civil lawsuit filed in the United Kingdom.

Three lawsuits stemming from the disastrous acquisition of Autonomy by HP have now been settled.

The charges relate to the sale of software company Autonomy to Hewlett Packard in 2011 for $11.7bn (£7.4bn).

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