In a significant development, a British judged ruled tech tycoon Mike Lynch had masterminded an elaborate fraud to inflate the value of his company – Autonomy, before it was acquired by Hewlett-Packard for $11 billion in 2011.
HP’s acquisition of Autonomy was one of the UK’s biggest tech deals.
Lynch received a further blow following the British interior ministry ordering his extradition to the United States to face criminal charges over the deal.
He now faces a maximum prison term of 20 years.
According to Lynch’s lawyers, he intends to appeal both rulings.
The court action, in HP’s favour, comes after a decade-long battle.
HP “won the majority of its civil case against Lynch” and the damages, which will be announced at a later date, is likely to be smaller than the $5 billion demanded.
“The claimants have substantially succeeded in their claims,” said Hildyard to the High Court, in a one hour summary of his much longer judgment, following a nine-month trial and a two-year wait for his decision.
According to the judgement, Lynch was aware that Autonomy’s practices were dishonest, its revenue recognition was improper and its accounts false.
Britain’s interior ministry said it had to sign the extradition order if there were no grounds to prohibit the order being made. The criminal charges in the United States include wire fraud and securities fraud.
“On 28 January, following consideration by the courts, the extradition of Dr Michael Lynch to the US was ordered,” said a spokesperson for the Home Office.
According to Lynch’s lawyers, the accused is a British citizen who ran a British company, thus the case should be resolved in Britain and not in the United States.
“Dr Lynch firmly denies the charges brought against him in the U.S. and will continue to fight to establish his innocence,” said Chris Morvillo, Lynch’s lawyer. “This is not the end of the battle — far from it. Dr Lynch will now file an appeal to the High Court in London.”
“HPE is pleased that the judge has held them accountable,” said a spokesman for Hewlett-Packard Enterprise (HPE) following the London court’s ruling.
In 2016, HP had sold the remnants of Autonomy along with other assets to Micro Focus, a British company, in 2016.