Economy

Former Autonomy boss Lynch to fight U.S. fraud charges

Former Autonomy boss Lynch to fight U.S. fraud charges”

British tech billionaire Mike Lynch, the founder and chief executive of United Kingdom software giant Autonomy, has been charged with fraud in the US.

They face 14 counts of conspiracy and fraud, according to Reuters - a charge which carries a maximum penalty of 20 years in prison.

Tech giant HP Inc has reported strong Q4 revenues of $15.4bn, yielding it a tidy $1.5bn in net income.

HP claims that Lynch, along with Autonomy's former finance chief, Sushovan Hussain, and vice president of finance Stephen Chamberlain, overstated revenues in order to inflate the company's valuation.

The BBC reports that the accused also "intimidated, pressured and paid off persons who raised complaints about or openly criticised Autonomy's financial practices and performance".

They said the United States allegations are stale and meritless and reject them emphatically.

The Department of Justice said Lynch and Chamberlain engaged in a scheme to deceive HP about Autonomy's financial condition and its prospects for growth by, among other things, providing HP with materially false and misleading quarterly and annual financial statements during the negotiations between the two companies. "It targets a British citizen with rehashed allegations about a British company regarding events that occurred in Britain a decade ago", Lynch's lawyers said in a statement.

His lawyers, Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson, said: "These stale allegations are meritless and we reject them emphatically". A Serious Fraud Office investigation in the United Kingdom was closed in 2015 without charge, but since then we've seen suit and countersuit leading up to this moment. Mr. Hussain was charged and convicted of fraud earlier in 2018.

Lawyers for Lynch told the Financial Times the indictment was a "travesty of justice", since it brought to a criminal court a "business dispute" over the application of United Kingdom accounting standards overseas.

He was chief executive of Autonomy for more than 15 years, helping it to become one of the UK's most successful technology companies on the FTSE100. "He has done nothing wrong and will vigorously defend the charges against him".



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