'A travesty of justice' - Suffolk businessman charged with fraud hits out at allegations
PUBLISHED: 10:22 30 November 2018 | UPDATED: 20:18 30 November 2018
A Suffolk software entrepreneur has been charged with fraud in the US.
Mike Lynch, former chief executive of software giant Autonomy, was charged in relation to the sale of the company to US computer firm Hewlett-Packard (HP) in 2011. He strenuously denies the charges against him.
His former finance chief, Sushovan Hussain, was found guilty in April of accounting fraud.
Autonomy, a highly successful business based in Cambridge and San Francisco, was sold to HP for £8bn in 2011.
The charges allege that between 2009 and 2011, Dr Lynch and former Autonomy finance executive Stephen Chamberlain issued statements which artificially inflated the company’s performance between 2009 and 2011 - a claim he has always denied.
Dr Lynch’s side has always maintained there was no wrong-doing and that the claims show “at best, a difference of opinion over accounting policies — a disagreement in which two Big Four firms, Deloitte (Autonomy’s auditor) and Ernst & Young (HP’s firm) agree that there is nothing wrong with the pre-acquisition financials”.
On a blogsite maintained by Dr Lynch on behalf of the former management team at Automony, he previously said HP’s claim was “a desperate search for a scapegoat”, and “one long disagreement over accounting treatments, and have nothing to do with fraud”.
The Serious Fraud Office in the UK halted a two-year investigation into HP’s acquisition of Autonomy back in January 2015.
The SFO, which launched its investigation in March 2013, said there was insufficient evidence for a realistic prospect of conviction.
It added: “In respect of other aspects and on the application of well-established principles, jurisdiction over the investigation has been ceded to the US authorities, whose investigation is ongoing.”
A statement from Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson, attorneys for Mike Lynch said: “This indictment is a travesty of justice.
“Mike Lynch is a world-leading entrepreneur who started from nothing and spent his life building a multi-billion dollar technology business that solved critical problems for companies and governments all around the world. These stale allegations are meritless and we reject them emphatically.
“This case is unsupportable. It targets a British citizen with rehashed allegations about a British company regarding events that occurred in Britain a decade ago.
“It has no place in a US court. The claims amount to a business dispute over the application of UK accounting standards, which is the subject of a civil case with HP in the courts of England, where it belongs.”
The statement added Dr Lynch “has done nothing wrong and will vigorously defend the charges against him”.
Dr Lynch founded Autonomy, which was spun out from his previous company, Neurodynamics, in 1996.
It was based on technology invented at Cambridge University, where he studied information sciences. He gained a PhD and held a research fellowship in adaptive pattern recognition.
He was chief executive of Autonomy for more than 15 years, helping it to become one of the UK’s most successful technology companies on the FTSE100.
He has won numerous awards, and was given an OBE for services to enterprise in 2006.