HP confirms it will sue Autonomy founder Mike Lynch over alleged fraud

HP told the court: “The shareholder plaintiffs who originally sued HP’s directors and officers now agree that Hussain, along with Autonomy’s founder and CEO, Michael Lynch, should be held accountable for this fraud.

“The settlement, therefore, provides for the shareholder plaintiffs to drop their claims against the victims of Lynch and Hussain’s fraud, and for their counsel to assist HP in pursuing the perpetrators of the fraud, who inflicted billions of dollars of harm on the company.”

“Hussain also knows that prosecutors on both sides of the Atlantic are investigating him, that HP is cooperating with those authorities and that, until he is charged, he has no access to the information that HP is providing to the authorities.

"So Hussain... wraps himself in a mantle of self-righteousness in an attempt to obtain discovery that he hopes will help him stay out of prison and defend the civil litigation he expects HP will file in the UK.”

HP bought Autonomy for $11.7bn (£7.1bn) in 2011 in the largest-ever acquisition of a British technology company. A little over a year later it took an $8.8bn charge on the deal after uncovering alleged accounting improprieties, misrepresentation and disclosure failures by Dr Lynch and Mr Hussain.

The former Autonomy management team had already acrimoniously quit HP after clashing with the Silicon Valley company’s leadership, particularly its chief executive Meg Whitman.

HP’s allegations are being investigated in the US by the Department of Justice and in the UK by the Serious Fraud Office.

A spokesman for Dr Lynch and Mr Hussain said: “This breathless ranting from HP is the sort of personal smear we’ve come to expect”.

“As the emotional outbursts go up, the access to facts seems to go down. HP has struck a corrupt and collusive settlement to try to bury the truth rather than face a court. Meg Whitman is buying off a bunch of lawyers so she doesn’t have to answer charges of incompetence and misdirection in front of a judge and jury.

“Quite simply we are asking for discovery and facts, they are trying to hide them – that’s what separates us and her.”

HP’s allegations centre on claims that Autonomy booked revenues on sales to resellers who had no end customer and that it did not properly disclose the level of low-margin computer hardware sales used to drive its main software business. Dr Lynch and Mr Hussain deny any wrongdoing.

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