British tech pioneer Mike Lynch’s fraud trial in San Francisco will conclude on Monday with closing arguments in the $11 billion sale of his software company Autonomy by Hewlett-Packard
At trial, the entrepreneur with a degree from Cambridge University entered his defense, denying any misconduct and testifying that HP botched the integration of the two companies.
HP depreciated the value of Autonomy by $8.8 billion in the first year following the acquisition.
Stephen Chamberlain, a former finance executive at Autonomy, and Lynch are accused of fraud and conspiracy about their purported scheme to artificially increase the company’s revenue from 2009 onwards to lure a potential acquirer.
Prosecutors assert that the two individuals inflated Autonomy’s finances through various means, such as “round-trip” transactions in which cash was fronted to clients via fictitious contracts and backdated agreements.
More than thirty government witnesses have testified at the trial, which commenced in mid-March. Among them was Leo Apotheker, the former CEO of HP, who was terminated several weeks after the announcement of the autonomy deal.
As a result of its haste to acquire Autonomy before prospective competitors, Lynch’s legal team contends that HP expedited due diligence before the sale.
Lynch testified that he had been preoccupied with technological matters and delegated the accounting decisions and money matters to Sushovan Hussain, Autonomy’s former chief financial officer.
Separately convicted in 2018 at trial in the same court was Hussain. January marked his release from a U.S. prison following the completion of his five-year term.
Lynch was a prominent technology entrepreneur in the United Kingdom, earning comparisons to Bill Gates, co-founder of Microsoft, and Steve Jobs, co-founder of Apple (AAPL.O).
The Autonomy acquisition, one of the most significant British technology transactions at the time, was intended to bolster HP’s software business.
Conversely, it created a sequence of contentious and costly legal disputes.
In London in 2022, HP prevailed substantially in civil litigation against Lynch and Hussain; however, the damages awarded have not been determined. The firm is in pursuit of $4 billion.