Richard Curran Autonomy founder Lynch was looking over his shoulder as long ago as 2015
Autonomy founder Mike Lynch was a man looking over his shoulder, even when I interviewed him for radio in early 2015. The US trial of the London-born mathematician, described as Britain’s Steve Jobs, kicked off during the week. Lynch faces charges of 16 counts of fraud surrounding the sale of his tech company, Autonomy to HP back in 2011 for $11.1bn.
He has always maintained his innocence and denied any wrongdoing.
During the interview, Lynch told me the UK’s Serious Fraud Office had looked into allegations by HP against him but had “shut down” the investigation just two weeks earlier, which they had.
However, Lynch certainly was not in the clear. A subsequent civil court action by HP found he had fraudulently inflated the value of his company before its takeover.
HP was suing for $4bn (€3.7bn) and hearings began last month into the scale of the damages. Lynch was then extradited to the US to face criminal trial. Autonomy’s former finance director Sushovan Hussain was found guilty of fraud in the US.
The big thing Lynch wanted to talk about back in early 2015 was the £1bn investment fund he had put together. Known as Invoke Capital, he said around 10pc of it was Autonomy-related and the rest was outside investment. I assume most of that 10pc was from him.
Invoke has made some pretty good investment bets in the AI and cyber-security area in the intervening years, including AI fraud detection engine company Featurespace and Luminance which develops machine learning for the legal industry.
But the biggest punt by Invoke has been Darktrace, the stock market-listed AI cyber security firm. Its shares have rocketed by 70pc in the last year, as anything with AI in it has been heavily backed. Lynch and his wife are reported to own 9pc of Darktrace. With a market cap of £3.2bn (€3.75m), the Lynch family holding is worth around £289m (€337m).
It isn’t clear how much of it is held by Lynch and how much is held by his wife. Lynch’s lawyers in the US said the tech entrepreneur had a net worth of $450m. His bail bond was $100m and he has been under guard at home in the US while awaiting trial. He would have earned around $800m from the sale of Autonomy back in 2011.
Darktrace’s connection to Lynch, through Invoke Capital has created its own difficulties, especially during his extradition proceedings to the US.
When it was listing on the stock exchange, Lynch’s family were said to own around one fifth of it. Its registration document was obliged to warn in filings at the time that it may face “potential liability in relation to possible money-laundering offences arising out of its historic funding” by Lynch’s investment firm.
Lynch has vigorously denied any wrongdoing over the Autonomy deal and is expected to testify at his trial in the coming weeks.
When I spoke to Lynch in 2015 he clarified that despite media references to being born in Tipperary, he was actually born and raised in Britain. His parents were from Ireland.
He also said he was looking forward to watching what the next 20 years would bring when it came to AI and tech development. Whether he watches those advances from behind prison bars or not depends on the verdict of a San Francisco jury.
HOUSING CRISIS WILL OUTLAST VARADKAR BY MANY YEARS
The housing crisis will stick around long after Leo Varadkar is gone as Taoiseach. Having achieved a lot in areas like Brexit and the Border, housing consistently remained the easiest stick with which to beat Fine Gael after 13 years in government.
And there is no let up. Property prices accelerated again with a jump of over 5pc recorded nationally for the 12 months to the end of January. Gains made in building more houses are insufficient to suppress a market with huge demand; enough people with access to finance and state supports like €100,000 towards the purchase of a new home.
At some point it will really begin to hurt the likes of foreign direct investment and jobs. IDA Ireland chairman Feargal O’Rourke warned as much this week, although he denied that it was holding things back right now.
O’Rourke said the country would need 50,000 new homes by 2025 to meet demand.
Few people believe that will actually ever be achieved.
Sinn Féin stuck its head up recently and suggested it would like to get the average price of a new home down to €300,000. It is currently over €366,000. Policies aimed at making that happen would face a huge backlash from homeowners who would see the value of their homes fall in certain cases.
Therefore, the only way to orchestrate the nirvana of an affordable housing market is to have houses retain their current value while somehow ensuring more people can afford to pay that price.
Even though we would build tens of thousands of houses per year, the market would be engineered or expected to continue to bolster prices. The only way that can be achieved is by the State continuing to write very big cheques to first-time buyers, or banks being allowed to lend more. If that were to happen, things could start to look a bit like 2005 or 2006 again.
There is probably a very small barely navigable landing spot for the housing market, where private-house prices don’t fall but barely tick up, and enough affordable and social homes are built in that part of the market. Meanwhile, this scenario also relies on slow ending of state supports to buy, while wages go up to replace them.
Two words “pipe” and “dream” come to mind. So, what is the plan, not only for the number of new house builds but where the price of those houses should go? This one has been firmly kicked down the road. Perhaps the new Taoiseach will enlighten us.