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Ex-Autonomy boss deflects blame at US fraud trial

By AFP

May 25, 2024 10:22 PM


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British businessman Michael Lynch, accused of $11 billion in fraud linked to the sale of his software firm Autonomy to Hewlett-Packard, refuted accusations he duped the US tech stalwart during his trial Thursday, US media reported.

Prosecutors contend Lynch took part in a massive scheme as Autonomy's chief executive to deceive HP by pumping up his company's value before its 2011 sale.

Under questioning by his attorney, Lynch told jurors in a San Francisco federal courtroom that it was "surreal" to hear government witnesses tie him to decisions and discussions he took no part in, according to a Bloomberg report.

"Of course, it wasn't perfect," Bloomberg quoted Lynch as saying about Autonomy.

"The reality of life is that it's nuanced and it's messy and sometimes you do your best to get through it, and companies are just like that."

Lynch is charged with conspiring to artificially drive up the company's value to get more money from HP.

His stake in Autonomy earned him about $815 million from its sale, according to a criminal indictment.

Just one year after the mega-deal, HP reported a write-down of $8.8 billion -- including more than $5 billion it attributed to inflated data from Autonomy.

The Autonomy takeover led to the ouster of Leo Apotheker as HP chief executive in September 2011, and HP subsequently said it had discovered massive accounting irregularities.

Lynch has claimed HP is making him a scapegoat for the company's failures when it came to acquisitions.

HP won a civil fraud case in Britain over the sale, with a High Court judge ruling in 2022 that it had been duped into overpaying.

HP sued two executives, Lynch and former chief financial officer Sushovan Hussain, for around $5 billion.

HP claimed the two men had "artificially inflated Autonomy's reported revenues, revenue growth and gross margins... over a sustained period of time."

A US court in 2018 convicted Hussain of fraud relating to the sale and jailed him for five years.

Lynch, from Suffolk in eastern England, has disputed all charges and denied any wrongdoing.

US prosecutors accused Lynch of wire fraud and securities fraud, and conspiracy to commit offenses involving years of falsified records.

Lynch was extradited to the United States from Britain to stand trial on the criminal charges, which could put him in prison for as long as 25 years.


AFP


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