Autonomy’s former boss Mike Lynch charged with fraud in the US over £7billion sale of the British software company to Hewlett-Packard
- US has charged former CEO Mike Lynch and finance boss Stephen Chamberlain
- They are accused of having inflated the firm’s performance before the sale
- The indictment says they made ‘false and misleading statements’ to hide the fact
Tech tycoon Mike Lynch has been charged with fraud in the US over the sale of his software company Autonomy to Hewlett-Packard in 2011.
The charges, which were filed overnight and follow a six-year investigation, include 14 counts of conspiracy and fraud and carry a maximum penalty of 20 years in jail.
The US justice department has accused Lynch and former Autonomy finance executive Stephen Chamberlain of having artificially inflated the company’s performance between 2009 and 2011 – just before it was sold to HP.
Fraud charges: Mike Lynch, founder and former chief executive of Autonomy
The indictment also says they made ‘false and misleading statements’ to cover the fact. And that they ‘intimidated, pressured and paid off persons who raised complaints about or openly criticized Autonomy’s financial practices and performance’.
But Lynch’s lawyers said the indictment was a ‘travesty of justice’ and that he would contest the charges.
‘These stale allegations are meritless and we reject them emphatically’, Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson said in a statement.
They added: ‘There was no conspiracy at Autonomy and no fraud against HP for the DoJ to take up. HP has a long history of failed acquisitions. Autonomy was merely the latest successful company it destroyed. HP has sought to blame Autonomy for its own crippling errors, and has falsely accused Mike Lynch to cover its own tracks.
‘Mike Lynch will not be a scapegoat for their failures. He has done nothing wrong and will vigorously defend the charges against him.’
It comes as Sushovan Hussain, Autonomy’s former chief financial officer, was convicted of fraud in a US court earlier this year.
Lynch, who co-founded Autonomy in 1996 and was once dubbed Britain’s answer to Bill Gates for turning the firm into a world leader, sold it to HP for $11billion (£7.1billion) in 2011.
Mike Lynch,But a year later HP wrote off three-quarters of Autonomy’s value and accused executives, including Lynch, of having cooked the books to make it look more valuable than it was.
Hewlett Packard Enterprise issued a statement saying: ‘HPE believes that the facts uncovered during the course of this matter will further demonstrate the harm that was caused by Dr Lynch, Mr Chamberlain, Mr Hussain and others to HP and looks forward to seeing justice served once again’.