Lynch faces $4bn claim in Autonomy fraud case

MIKE LYNCH, the British technology tycoon, is facing a claim of $4bn (£3.2bn) after he was found to have fraudulently inflated Autonomy’s value before its takeover by Hewlett Packard.

Lawyers for HP called on the High Court to award billions of dollars in damages after Lynch and Autonomy’s former finance chief, Sushovan Hussain, were found to have inflated the revenues of his Cambridge business prior to its 2011 takeover for $11bn.

The hearing over damages comes two years after Lynch was found by the High Court to have “induced” HP and it is weeks before he faces a criminal trial over the claims in the US.

HP had argued Autonomy, at the direction of Lynch, manipulated its revenue figures, including by booking “revenue-pumping” transactions.

Conall Patton KC, HP’S lawyer, told the court there was an “immediate and dramatic effect” on Autonomy’s valuation after the fake revenues were removed.

The US company claimed it was owed around $4bn in damages by Lynch and Hussain, slightly down on its previous calculations.

An expert for the US company argued that the “actual value” of Autonomy was around $7bn. However, lawyers for Lynch argued HP would have probably paid the same price for Autonomy, even with the changes to its sales figures, since its executives were more concerned with acquiring its powerful technology.

Richard Hill KC, for Lynch, told the court the “fundamental value of the technology is unaffected” by the fraud. “Autonomy would still have been particularly attractive to HP,” he claimed.

Mr Justice Hildyard, the judge in the case, previously ruled that HP may receive “substantially less” than it had originally sought from Lynch.

Lynch is currently under house arrest in the United States awaiting his trial, which is expected to begin in March.

He had spent years fighting extradition ahead of criminal proceedings brought by US prosecutors.

Hussain was previously found guilty in a US court in 2018 on multiple counts of fraud and conspiracy and sentenced to five years in prison.