British Lawsuit Over HP Acquisition Autonomy Finally Ended

0 16,412

HPE is largely in favour of the British Supreme Court in a case against Mike Lynch, the founder of the start-up Autonomy. Both were involved in a lawsuit over the disastrous takeover of the start-up for $11 billion in 2011.

With the Supreme Court ruling, it seems almost certain that Briton Lynch will be extradited to the United States, where he will face fraud charges. The failed takeover of big data company Autonomy caused a scandal ten years ago. According to Lynch, several directors of the then HP, including CEO Apotheker, had not read the file carefully before agreeing to a huge acquisition of $ 11 billion at the time.

In 2011, HP took over the British start-up Autonomy. The latter made data analysis software, and Gartner saw the acquisition as a step by HP towards ‘big data’. The tech giant deposited $11.7 billion in cash for the start-up, at the time the third-largest HP acquisition ever, after Compaq and EDS.

But it soon became apparent that there was a hair in the butter. When publishing its quarterly results at the end of 2012, HP announced that it had to book a write-down of 8.8 billion euros for ‘disruptions’ in acquiring Autonomy. In short, it had paid way too much for the start-up. Moreover, according to HP, Autonomy has misrepresented its finances and prospects. The company is said to have committed fraud when booking sales figures, among other things.

However, Mike Lynch, founder of Autonomy, says he has always stuck to the British way. In an interview, he talks about mismanagement, in which HP completely failed to integrate his company with the big brother. He also says HP’s executives should have done their due diligence, and the company hadn’t read the reports on Autonomy before taking over. The role of four different auditors, including Deloitte, who wrote positive reports on Autonomy, was also questioned. If the company had committed such fraud, shouldn’t those auditors have seen it?

With lawsuits filed by HP and Mike Lynch, that whole frenzy has meanwhile made its way through the British legal system. The Supreme Court largely agrees with HPE (which inherited the case when the company split in 2015). This means that Lynch is likely to be extradited to the US unless the British Home Secretary stops that tonight.

Upon extradition, Lynch will face charges of fraud in the US in a criminal case filed by the FBI and supported by HPE. Lynch co-founder Sushovan Hussain was previously sentenced in the US to five years in prison for fraud in the same case.

Leave A Reply