HP levels fraud claim at former Autonomy chief Mike Lynch

Hewlett-Packard levelled an accusation of fraud directly at Irish-born former Autonomy chief executive Mike Lynch for the first time yesterday as it ratcheted up the war of words over the former UK software company.

The US group said it was preparing a lawsuit in the UK against Mr Lynch and Shushovan Hussain, Autonomy’s former chief financial officer, over its disastrous 2011 acquisition of the company.

HP took an $8.8 billion write-down the year after the deal, more than $5 billion of it tied to alleged accounting misrepresentations. It has always blamed Autonomy’s management for the debacle, but it had not personally accused Mr Lynch of fraud.

In its latest legal salvo, HP targeted the former Autonomy boss directly, saying: "The shareholder plaintiffs . . . now agree that Hussain, along with Autonomy's founder and CEO, Michael Lynch, should be held accountable for this fraud."

‘Personal smear’

A spokesperson for Mr Lynch, who hails from Carrick-on- Suir in Co

Tipperary

, said: “This breathless ranting from HP is the sort of personal smear we’ve come to expect.”

The allegations came in a legal response from HP to a bid by Mr Hussain to block its settlement of three shareholder lawsuits, which accused the US group of lapses in the Autonomy deal, saying HP officials were wrongly absolved in the ill-fated acquisition of Autonomy for $11.1 billion in 2011.

Denied wrongdoing

In the settlement, reached on June 30th, shareholders had agreed to end efforts to force current and former HP officials, including chief executive

Meg Whitman

, to pay damages to the company over its Autonomy purchase. Instead, the shareholders agreed to help HP pursue claims against former Autonomy officials such as Mr Hussain and Mr Lynch, who have denied wrongdoing.

Last month, Mr Hussain said in a court filing that the “collusive and unfair” settlement, if approved by a federal judge, would let HP “forever bury from disclosure the real reason for its 2012 write-down of Autonomy: HP’s own destruction of Autonomy’s success after the acquisition.”

In a San Francisco court filing, HP said Mr Hussain was claiming to take the side of HP shareholders when he was “one of the chief architects of the massive fraud on HP”.

It added: “Hussain, the fraudster, wraps himself in a mantle of self-righteousness in an attempt to obtain discovery that he hopes will help him stay out of prison.” – Copyright The Financial Times Limited 2014/Bloomberg