Hewlett-Packard wins civil fraud case against Mike Lynch over Autonomy sale | Hewlett Packard

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Hewlett-Packard has won a civil fraud trial against Mike Lynch, after the US company alleged that the man once hailed as Britain’s answer to Bill Gates deceived it into paying his software company Autonomy £8.2 billion.

The ruling, delivered by Supreme Court Justice Hildyard, comes on the same day as Home Secretary Priti Patel’s deadline to decide whether Lynch can be extradited to the United States to face a criminal fraud trial there.

“The plaintiffs were largely successful in their claims in this lawsuit,” the judge said.

Who is Mike Lynch?

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Mike Lynch, 56, the Essex-born son of a nurse and firefighter, won a school scholarship at the age of 11, then went on to pursue his undergraduate and doctoral studies at Cambridge. His doctoral thesis is among the most consulted doctoral theses at the university, and he is considered a world leader in the field of signal processing, which is fundamental to data handling.

A series of technology startups followed in the 1980s and 1990s, culminating in the formation of Autonomy in 1996. That company aims to analyze and sort “unstructured” information from sources like phone calls—a potential data goldmine for big companies.

His success brought great prestige with him. He was named Entrepreneur of the Year by the Confederation of British Industry in 1999, was awarded the OBE Medal in 2006, and became a chancellor to 10 Downing Street in 2011. Lynch has also served as a trustee for the Royal Botanic Gardens, Kew, and has sat on the Board of Directors BBC and the British Library.

In 2011, he made a windfall of about $800 million from the sale of Autonomy to US technology company Hewlett Packard in a deal worth $11 billion (£8 billion). However, the deal soon went wrong. Lynch was fired from the autonomy in 2012.

The companies that succeeded Hewlett Packard followed Lynch in a civil case in London, alleging that he had fraudulently inflated the value of Autonomy. In 2018, US authorities filed criminal charges against him and other former Autonomy executives, alleging that they “participated in a fraudulent scheme to deceive independent buyers and sellers of securities.” They started the handover procedures in 2019.

However, Lynch remains influential in the UK’s tech scene. He was an early supporter of cybersecurity firm Darktrace, and had a stake worth £220m by July 2021 after it was listed on the London Stock Exchange. Darktrace said her association with Lynch was a reputational risk when it applied for its initial public offering.

Married with two daughters, his hobbies are listed in Who’s Who as jazz saxophones and keeping rare breeds, including red cattle kept in his Suffolk home.

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He said the damages are likely to be much less than the $5 billion claimed by Hewlett-Packard (HP) and subsequent companies.

HP alleged that it overpaid for the acquisition fraud committed by Lynch and a chief lieutenant.

In separate proceedings, Lynch is still awaiting a ruling from the Home Office on whether he can be extradited to the US, as he is accused of defrauding HP investors over a £8.2 billion deal in 2011.

A year after the acquisition, HP wrote down Autonomy by about $9 billion and claimed that Lynch and his team had wrongly inflated the company’s value through accounting deception.

A London court ruled in July that Lynch, who denies wrongdoing, should be extradited.

The US trial will cover much of the same grounds as the London civil case.

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