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Posted by Richy George on 30 November, 2018This post was originally published on this site
UK entrepreneur turned billionaire investor, Mike Lynch, has been charged with fraud in US over the 2011 sale of his enterprise software company.
Lynch sold Autonomy, the big data company he founded back in 1996, to computer giant HP for around $11BN some seven years ago.
But within a year around three-quarters of the value of the business had been written off, with HP accusing Autonomy’s management of accounting misrepresentations and disclosure failures.
Lynch has always rejected the allegations, and after HP sought to sue him in UK courts he countersued in 2015.
Meanwhile the UK’s own Serious Fraud Office dropped an investigation into the Autonomy sale in 2015 — finding “insufficient evidence for a realistic prospect of conviction”.
But now the DoJ has filed charges in a San Francisco court, accusing Lynch and other senior Autonomy executives of making false statement that inflated the value of the company.
They face 14 counts of conspiracy and fraud, according to Reuters — a charge which carries a maximum penalty of 20 years in prison.
We’ve reached out to Lynch’s fund, Invoke Capital, for comment on the latest development.
The BBC has obtained a statement from his lawyers, Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson, which describes the indictment as “a travesty of justice”.
The statement also claims Lynch is being made a scapegoat for HP’s failures, framing the allegations as a business dispute over the application of UK accounting standards.
Two years ago we interviewed Lynch on stage at TechCrunch Disrupt London and he mocked the morass of allegations still swirling around the acquisition as “spin and bullshit”.
Following the latest developments, the BBC reports that Lynch has stepped down as a scientific adviser to the UK government.
“Dr. Lynch has decided to resign his membership of the CST [Council for Science and Technology] with immediate effect. We appreciate the valuable contribution he has made to the CST in recent years,” a government spokesperson told it.
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