Lynch ‘used fast cars’ in £3bn fraud, says HP

THE colourful tactics allegedly employed by the former boss of Autonomy to inflate the company’s value by have been set out in explosive court documents.

Dr Mike Lynch used a deal with a Premiership football club to exaggerate growth of the software group, and offered to buy a Porsche for one of his salesmen if he sold hardware that made the company appear more dynamic than it actually was, Hewlett Packard has claimed.

He also fired a US manager who raised questions over the company’s accounting policies, the documents allege.

HP is suing Lynch, alleging a £3bn mega-fraud at the software company in the run up to HP’s £7.1bn takeover in 2011. Lynch has accused HP of fraud for mismanaging the company following the acquisition, and is suing over reputational damage.

In the latest slew of documents, filed with the High Court in London, HP said that Lynch told salesman Michael Sullivan to sell $10m (£6.6m) of hardware in a single quarter.

‘Lynch told Sullivan that if he achieved this goal Lynch would buy him a Porsche,’ the filings state.

It also says that a deal to supply Tottenham Hotspur with software to run its website coincided with a £63m deal to sponsor the team’s shirts.

Lynch also ‘suppressed concerns raised’ by US finance chief Brent Hogenson, it is alleged. Hogenson was later dismissed ‘at the direction of Lynch’.

Friends of Lynch argue that Hogenson’s allegations were quashed at the time following a probe by its auditor Deloitte, and that he was due to leave the firm anyway.

A letter from Lynch’s lawyers at Clifford Chance said: ‘HP’s losses were not caused by anyone at Autonomy. They were caused by HP’s own incompetence and malfeasance. That is the real story of fraud here.’

It adds: ‘Dr Lynch looks forward to unmasking the falsity and hypocrisy of these allegations in the courts of England.’