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Autonomy Co-founder Lynch Faces Trial Over Alleged Revenue Inflation Leading to HP’s Disastrous Acquisition

Federal prosecutors in San Francisco have accused Autonomy co-founder Lynch and former finance executive Stephen Chamberlain of inflating the company’s revenue, starting in 2009. This alleged scheme, prosecutors claim, led to HP’s disastrous acquisition of Autonomy in 2011, resulting in an $8.8 billion writedown and the firing of HP’s CEO. Lynch, who fought extradition, is now facing 16 counts of fraud and conspiracy, while Chamberlain faces 15 counts, both presumed innocent until proven guilty.

The unraveling of Autonomy has triggered over a decade of legal battles for Lynch. HP won a civil lawsuit against him and Autonomy’s former CFO, Sushovan Hussain, in London in 2022, seeking $4 billion in damages. Hussain was separately convicted on U.S. charges in 2018. Lynch, whose net worth is around $450 million, is currently under a $100 million bond and 24-hour house arrest in San Francisco, awaiting trial scheduled to run into late May. Jurors may hear from key witnesses, including former HP CEO Leo Apotheker, as the trial progresses.

In 2018, Hussain was convicted on 16 counts in a trial before U.S. District Judge Charles Breyer, who is now overseeing Lynch and Chamberlain’s trial. Lynch’s attorneys have suggested he might testify in his defense. A British judge ruled in January 2022 that Lynch orchestrated an elaborate fraud to inflate Autonomy’s value, supporting HP’s claims in the civil lawsuit. Lynch had previously criticized HP’s understanding of Autonomy’s technology, claiming they were out of their depth. The trial continues as Lynch and Chamberlain face the allegations against them, awaiting a unanimous verdict from the 12-person jury.

SOURCE: US NEWS | MARCH 18 2024

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