HP wins massive UK fraud case over autonomy purchase

Deepak Gupta January 29, 2022
Updated 2022/01/29 at 9:37 AM

US tech giant Hewlett Packard won its multibillion-dollar fraud case on Friday over its 2011 purchase of British software company Autonomy.

A year after the settlement, HP accused Autonomy of falsifying its accounts, claiming it had inflated its value and caused huge losses for the American company when the real situation emerged after the $11.1 billion sale (approximately Rs. 83,251 crores).

HP has sued two executives, Mike Lynch, British founder of Autonomy, and former chief financial officer Sushovan Hussain, for around $5 billion (approximately INR 37,500 crores).

In a summary of his ruling in what is believed to be Britain’s largest civil fraud trial, Judge Robert Hildyard said HP and the other plaintiffs “won substantially”.

Hildyard said damages to be paid will be determined later.

HP claimed that the two men “artificially inflated Autonomy’s reported revenues, revenue growth and gross margins… over a sustained period of time.”

The company announced a reduction of US$8.8 billion (approximately Rs. 66,000 crores) in the value of the company just over a year after the sale.

Interior Minister Priti Patel on Friday signed an order for Lynch’s extradition to the United States, where he faces separate criminal prosecutions over the sale, the Interior Ministry said in a statement.

Lynch has the right to appeal to the Supreme Court to appeal the extradition order, he added.

Lynch denied any wrongdoing.

A lawyer for the businessman, Kelwin Nicholls, said the court’s decision was “disappointing” and added that Lynch “intends to appeal.”

Another of Lynch’s lawyers, Chris Morvillo, said his client “firmly denies the allegations made against him in the US and will continue to fight to prove his innocence.”

Lynch was “a British citizen who ran a British company in Great Britain, subject to British laws and rules and that’s where the matter must be resolved,” Morvillo said.

Lynch, from Suffolk, eastern England, claimed that HP was making him “a scapegoat for its failures.”

HP attorney Laurence Rabinowitz told the court that Autonomy used “a variety” of fraudulent devices to increase or fabricate revenue.

In 2018, a US court convicted Autonomy’s chief financial officer, Hussain, of fraud related to the sale and jailed him for five years.

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