US tech giant Hewlett Packard Co on Friday won a multibillion dollar fraud case over its 2011 purchase of British software company Autonomy Corp PLC.
One year after the deal, HP accused Autonomy of falsifying its accounts, claiming it had inflated its value and caused huge losses for the US company when the correct accounting emerged after the US$11.1 billion sale.
HP sued two executives — Mike Lynch, Autonomy’s British founder, and former chief financial officer Sushovan Hussain — for about US$5 billion dollars.
Photo: Reuters
A US court in 2018 convicted Hussain of fraud relating to the sale and jailed him for five years.
In a summary of his decision in what is believed to be Britain’s biggest-ever civil fraud trial, judge Robert Hildyard said HP and other claimants had “substantially won.”
Hildyard said the damages to be paid are to be determined at a later date.
HP claimed that the two men had “artificially inflated Autonomy’s reported revenues, revenue growth and gross margins ... over a sustained period of time.”
The company announced a US$8.8 billion write-down of the firm’s value just more than a year after the sale.
British Home Secretary Priti Patel on Friday signed an order for the extradition of Lynch to the US, where he faces separate criminal proceedings over the sale, Patel’s office said in a statement.
Lynch has the right to apply to the British High Court to appeal the extradition order, it added.
Lynch has denied any wrongdoing.
A lawyer for the businessman, Kelwin Nicholls, said the court’s ruling was “disappointing,” adding that Lynch “intends to appeal.”
Another of Lynch’s lawyers, Chris Morvillo, said his client “firmly denies the charges brought against him in the US and will continue to fight to establish his innocence.”
Lynch is “a British citizen who ran a British company in Britain, subject to British laws and rules, and that is where the matter should be resolved,” Morvillo said.
Lynch, from Suffolk in eastern England, said that HP was making him “a scapegoat for their failures.”
HP lawyer Laurence Rabinowitz told the court that Autonomy used “a variety” of fraudulent devices to boost or invent revenue.
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