Fraud charges against ex-Autonomy boss Mike Lynch have been filed in US. This is related to its 2011 sale worth $11bn to Hewlett-Packard and it carries a term of up to 20 years in prison. At the time of its sale, it was seen as a runaway British success. Lynch, who has stepped down from being a government scientific adviser, will defend all charges against him, said his lawyers. The 14 charges filed against Lynch showed that he had made $815m fraudulently from those.
Founded by Mike Lynch in 1996, Autonomy developed software capable of extracting important data from unstructured sources like videos, emails, phone-calls and do things like monitor TV channels for subjects or words and suggest answers to call-center operators. It had its headquarters in Cambridge and San Francisco. A year after its takeover by the computer giant, in 2012, HP wrote off 3-quarters of Autonomy’s value.
Ex-finance chief of Autonomy, Sushovan Hussain was found guilty of fraud earlier this week. The charges against finance vice-president Chamberlain, Lynch and other co-conspirators was that from 2009 to 2011, they artificially inflated the company’s revenues by overstating them. Lynch and Chamberlain also made misleading comments to market analysts and regulators to cover Autonomy in addition to pressuring, intimidating and bribing people who dared to raise complaints against their malpractices.
Reid Weingarten and Chris Morvillo, Lynch’s lawyers, called the indictment ‘a travesty of justice’ and the allegations ‘stale’. In UK tech circles, Mike Lynch was extremely popular. His company Autonomy became one of the crown jewels in Silicon Fen which was a group of high tech businesses around Cambridge University. The sale to Hewlett-Packard made Autonomy’s founders rich and their hopes of propagating a new businesses generation in the same way as PayPal alumni Peter Thiel and Elon Musk did in California were high. But with HP writing off almost $9bn of the $11bn paid, the truth came to light. Mr. Lynch however never accepted the charges saying that all discrepancies were because of different methods of accounting of recognizing value.