Sun, Mar 24, 2019 - Page 16 News List

US adds criminal charges against ex-Autonomy CEO

Reuters

US prosecutors on Friday added three new criminal charges to their indictment against British entrepreneur Mike Lynch related to the US$11.1 billion sale of his software company, Autonomy Corp PLC, to what was then Hewlett-Packard (HP) Co in 2011.

Lynch faces a new charge of securities fraud, which carries a maximum prison term of 25 years, as well as additional charges of wire fraud and conspiracy in the 17-count indictment filed with the federal court in San Francisco.

The charges were revealed ahead of Monday’s scheduled start of a US$5 billion civil fraud trial in London’s High Court, where HP is accusing Lynch and former Autonomy chief financial officer Sushovan Hussain of involvement in accounting irregularities that caused it to overpay for the company.

Lynch has denied wrongdoing and blamed the failure of the acquisition on HP management.

The wire fraud and conspiracy charges were also added against Lynch’s co-defendant Stephen Chamberlain, a former Autonomy vice president of finance.

Lawyers for Lynch and Chamberlain did not immediately respond to requests for comment.

The Autonomy purchase was the centerpiece of a strategy by Leo Apotheker, HP’s chief executive at the time, to refocus his company on business services and products.

However, the purchase soured a year later when HP wrote off US$8.8 billion for Autonomy and accused Lynch, who founded that company in 1996, and his colleagues of accounting fraud.

The new securities fraud charge accuses Lynch of defrauding investors in connection with the purchase and sale of HP securities.

A federal jury in San Francisco in April last year convicted Hussain of wire fraud and other crimes tied to Autonomy’s valuation.

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