LONDON (Reuters) – Mike Lynch, once hailed as Britain’s answer to Bill Gates, faces, Hewlett-Packard (HP) in the London High Court on Monday in a multi-billion dollar showdown over the AMERICAN tech-giant is the purchase in 2011 of the Autonomy software company that he founded.
FILE PHOTO: The logo for The Hewlett-Packard Company is shown on a screen on the floor of the New York Stock Exchange (NYSE) in New York, USA, June 27, 2018. REUTERS/Brendan McDermid
The case is part of a dispute between HP and Lynch has a duration of more than six years about who is to blame for the disastrous deal that eventually cost the Silicon Valley loyal shareholders of billions of dollars.
HP is looking for damages of around $5 billion of Lynch and his former colleague, Sushovan Hussain, who claimed that they inflated the value of Autonomy for the sale of the big data company, whose software searches and organises unstructured information, such as phone calls.
Lynch has denied the accusations and said that the failure of the $11 billion acquisition was HP’s mismanagement.
The 53-year-old man, whose dissertation is one of the most consulted at the University of Cambridge, is counter-suing for more than $160 million for loss and damage caused by HP’s actions.
Autonomy was supposed to be the centerpiece of a plan to transform HP with a PC and printer maker, is a software focused on enterprise services firm, a shift is successfully carried out by IBM in the previous two decades.
Lynch has been engaged in a war of words with HP, since he was fired by former HP CEO Meg Whitman in 2012, less than a year after the deal is completed.
The entrepreneur has maintained his position in the British tech scene by investing in a series of new companies and the membership of organisations such as the Royal Society.
However, the stakes of the dispute escalated in November, when Lynch and Stephen Chamberlain, another former Autonomy of the executive, were indicted for wire fraud in the United States, a charge that carries a maximum term of 20 years in prison.
Lynch then stepped down from his government advisory role, and of the Royal Society committees. Hussain was found guilty in a related case in April 2018, but has not yet been sentenced.
The Autonomy deal began to turn sour before it was completed. Many shareholders baulked at the 79 per cent premium, the architect of the strategy CEO Leo Apotheker was sacked and HP’s board of directors is looking into the possibility to run away.
And a little more than a year after it was completed, HP said it had discovered “serious accounting improprieties” that had inflated the value of Autonomy, to write off more than $5 billion in connection with the failed deal.
That is, the amount that is now in the search of Lynch, who received about $800 million for his part in the Autonomy, and Hussain.
HP will argue that the Autonomy of the management made silent, loss-making hardware sales and misrepresented the revenue to blow up the Autonomy value of the claim.
Lynch will deny all of HP’s claims, his defense says, and a counter-document.
In the Lynch says that HP executives have evolved over a number of years to shift the responsibility for the failures in the acquisition and integration of Autonomy on him.
The case is set to last until the end of the year and then can the court another six months to reach a decision.
Edited by Alexander Smith