Published: Mon, December 03, 2018
Markets | By Otis Pena

Former Autonomy boss Lynch to fight U.S. fraud charges

Former Autonomy boss Lynch to fight U.S. fraud charges

British entrepreneur Mike Lynch faces criminal charges over the sale of his software company Autonomy to Hewlett-Packard.

The charges allege that Lynch and Autonomy's former vice president for finance, Stephen Chamberlain, inflated the firm's earnings from 2009 to 2011.

In short, Lynch and Chamberlain are accused of inflating Autonomy's sales numbers to hit quarterly targets so as to pocket fat performance-linked bonuses, and masquerading the business as a lucrative operation, the kind a large United States corporation might want to buy. The DOJ also wants Lynch to forfeit $815 million in personal gains from the Autonomy sale. "Lynch, Mr. Chamberlain, Mr. Hussain and others to HP", Hewlett-Packard Enterprise, the successor company to HP, said. Visit MarketWatch.com for more information on this news.

According to Bloomberg, Lynch's lawyers have described the indictment as a "travesty" and said that HP is making Lynch a "scapegoat" for HP's "long history of failed acquisitions".

"This case is unsupportable".

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"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. It targets a British citizen with rehashed allegations about a British company regarding events that occurred in Britain a decade ago.

For those who came in late, HP bought Autonomy as part of its then CEO's Leo Apotheker cunning plan to turn the maker of expensive printer ink into SAP. HP has sought to blame Autonomy for its own crippling errors, and has falsely accused Mike Lynch to cover its own tracks. Lynch, 18-cr-00577, U.S. District Court, Northern District of California (San Francisco).

The two Brits are accused of essentially the same acts of fraud that Autonomy's former chief financial officer, Sushovan Hussain, was convicted of in April.

The pair also said that the claims were related to a business dispute "over the application of United Kingdom accounting standards", and were central to a civil case against HP in English courts, "where it belongs".

The statement added Dr Lynch "has done nothing wrong and will vigorously defend the charges against him".

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