Hewlett-Packard overpaid for UK software company Autonomy by at least $5 billion after its founder Mike Lynch led a "systematic" effort to "artificially inflate" his company's revenues, according to a legal filing in which the US technology conglomerate set out its full case against the British entrepreneur for the first time.
HP is suing Mr Lynch and Sushovan Hussain, Autonomy’s former chief financial officer, alleging fraud while seeking damages of $5.1 billion in one of the largest civil cases brought in the UK against British nationals. Both Mr Lynch and Mr Hussain deny the claims.
In 2012, HP said it would take an $8.8 billion writedown of its disastrous $11.1 billion acquisition of Autonomy, $5.5 billion of which was due to alleged “accounting misrepresentations”.
In a claim filed at the High Court in London, HP alleged that the men led efforts over two-and-a-half years to engage in "improper transactions and accounting practices". Irish-born Mr Lynch told the Financial Times: "HP's claim is finally laid bare for what it is – a desperate search for a scapegoat for its own errors and incompetence. The contents of the claim are a simple rehash of previous leaks and insinuations that add up to one long disagreement over accounting treatments, and have nothing to do with fraud." – Copyright The Financial Times Limited 2015