HP accuses Autonomy's Michael Lynch of fraud

Tuesday 05 August 2014 15.00
Micheal Lynch described the company's comments as a 'smear'
Micheal Lynch described the company's comments as a 'smear'

HP has said the founder and former CEO of Autonomy, Michael Lynch, should be held accountable for fraud in relation to its takeover of the software firm.

The company’s comments come in a court filing made yesterday in response to an action by the former chief financial officer of Autonomy, Sushovan Hussain.

HP acquired Autonomy for $11.1bn in 2011, but a year later wrote down its value by $8.8bn. It accused officials of accounting fraud, which has been denied by executives.

The company yesterday said it would sue Mr Hussain as he seeks to block its settlement of three shareholder lawsuits over its purchase of the software company.

Mr Hussain is currently trying to block the settlement, saying HP officials were wrongly absolved in the ill-fated acquisition of Autonomy for $11.1 billion in 2011. 

In the settlement, reached on 30 June, shareholders had agreed to end efforts to force current and former HP officials, including chief executive officer Meg Whitman, to pay damages to the Palo Alto, California-based company over its Autonomy purchase.

Instead, the shareholders agreed to help HP pursue claims against former Autonomy officials such as Hussain and former CEO Michael Lynch, who have denied wrongdoing.

"The notion that (Hussain) should be permitted to intervene and challenge the substance of a settlement designed to protect the interests of the company he defrauded is ludicrous," HP said in a strongly worded court filing.

"The shareholder plaintiffs who originally sued HP's directors and officers now agree that Hussain, along with Autonomy's founder and CEO, Michael Lynch, should be held accountable for this fraud."

Last month, Mr Hussain said in a court filing that the "collusive and unfair" settlement, if approved by a federal judge, would let HP "forever bury from disclosure the real reason for its 2012 write-down of Autonomy: HP's own destruction of Autonomy's success after the acquisition."

"This breathless ranting from HP is the sort of personal smear we've come to expect. As the emotional outbursts go up, the access to facts seems to go down," Autonomy said in a statement in response to HP's filing.

"Meg Whitman is buying off a bunch of lawyers so she doesn't have to answer charges of incompetence and misdirection in front of a judge and jury."