EMAILED ON December 3, 2018 BY Conor Grant

US charges British billionaire with fraud for his $11.1B HP deal, the latest in a 7-year saga 

The US government charged British tech entrepreneur Mike Lynch with fraud related to the 2011 sale of his company, Autonomy, to HP. Less than a year after paying $11.1B for Autonomy, HP wrote down its value by $8.8B, claiming Autonomy misrepresented its value. 

The tumultuous timeline of a botched buyout:

  • 2011: HP acquires Autonomy for $11.1B (a 79% premium)
  • 2012: HP writes down its value by $8.8B (with no fraud accusations)
  • 2012: US and UK open fraud cases against Autonomy
  • 2015: UK drops criminal case against Autonomy
  • 2015: HP sues Lynch & co. for fraud, demands $5.1B (still in court)
  • 2015: Lynch countersues HP for $160m (still in court)
  • 2018: US convicts Autonomy CFO of fraud
  • 2018: US accuses Lynch of fraud

Either Lynch is a liar or HP didn’t do their due diligence

Lynch and his lawyers accuse HP of scapegoating Autonomy to cover up its “long history of failed acquisitions.”

Prosecutors now claim Lynch and his lackeys inflated revenue by backdating written agreements to record revenue in earlier periods and lying to auditors and regulators.

Now what?

Lynch’s lawyers dispute the charges, arguing the case belongs in civil court in Britain, not criminal court in California.  

If Lynch and co-defendant and former Autonomy CFO Sushovan Hussain (who has already been convicted of 16 other counts of fraud) are convicted of these 14 counts of conspiracy and wire fraud, they face up to 20 years in prison and a $250k.