Ex-Autonomy boss Mike Lynch extradited to US over fraud claims

TECH tycoon Mike Lynch has been extradited to the US to face the prospect of criminal charges over Hewlett Packard’s $11 billion acquisition of his software company Autonomy in 2011.

The extradition was confirmed by the Home Office this morning.

HP has previously accused Lynch and former Autonomy finance director Sushovan Hussain of having conducted “a systematic and sustained scheme to make Autonomy look like a rapidly growing, pure software company whose performance was consistently in line with market expectations.”

HP said those efforts “artificially inflated Autonomy’s reported revenues, misrepresented its rate of organic growth and overstated its gross and net profits.” The US tech firm subsequently wrote off $8.8 billion from Autonomy’s value. Lynch, below, has denied any wrongdoing and had been fighting the extradition request, arguing he should be prosecuted in Britain.

However, the High Court refused permission to appeal the extradition on April 21.

“Dr Lynch was extradited to the US on 11 May,” the Home Office said in a statement. A spokesperson for Lynch declined to comment. Last year, HP won a six-year civil fraud case against Lynch in which he was found to have manipulated Autonomy’s accounts to inflate the company’s value. HP had been seeking damages of up to $5 billion, but was told by a judge to expect significantly less than that.

Lynch is worth £1.1 billion according to the Evening Standard Tech Rich List, which includes the £500 million he pocketed from the sale of his stake in Autonomy.

The former student of physics, maths and biophysics is one of the biggest names in UK business. Once called the UK’s answer to Bill Gates, his expertise in pattern recognition helped take Autonomy all the way to the FTSE 100, before one of the biggest deals of all time also turned into one of most notorious.

Lynch also controls a 4.3% stake in cybersecurity giant Darktrace, and was an early investor in London-based legal AI firm Luminance.

Darktrace CEO Poppy Gustafsson had previously rejected concerns over Lynch’s relationship with the company. She said: “It’s going to become less of an issue. He’s a shareholder, he owns 4% of the business but he’s not involved operation in the business. It’s not question that our employees ask us about or our customers ask us about.”

But Darktrace’s financial statements have also been called into question after a New York-based investment business expressed its “fear that sales, margins, and growth rates may be overstated.”

Quintessential Capital Management produced a short-seller report into the firm’s activity and said it has “failed to provide a satisfactory explanation for most of the issues we raised.”

Darktrace has rejected the allegations and has commissioned accountancy firm EY to conduct an investigation.

There is no suggestion of criminal activity by Darktrace.