Tuesday 7 May 2019 5:34 pm

HP ‘not suing Autonomy US exec to go after Mike Lynch’ in fraud trial

Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

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Hewlett Packard (HP) is not suing Autonomy’s former US chief executive in order to use his evidence against British businessman Mike Lynch in the biggest fraud trial in UK history, a court heard today.

HP is suing Lynch, the former chief executive of software firm Autonomy, and ex-finance chief Sushovan Hussain for $5.1bn, alleging that the pair falsely inflated Autonomy’s reported revenue ahead of its 2011 acquisition of the firm.

Read more: Lynch blames HP for 'botched' Autonomy deal in $5bn fraud trial

Christopher Egan, the former US chief executive of Autonomy, has admitted wrongdoing to the US Department of Justice.

Robert Miles QC, for Lynch, questioned why Egan, who was giving evidence to London’s High Court via video link, was not being sued by HP for his involvement in the alleged fraud.

“You’re someone who had got several properties, you have wealth of over $10m. You’re worth suing,” Miles said during the cross-examination.

“Can you explain why HP has never threatened to sue you in respect of these events?”

“I can’t speak for their legal strategy but I’m aware of my own wrongdoing and I don’t think it amounts to something I would sue,” Egan said.

Miles added: “The reason that HP has not sued you is because they just want your evidence.

“You’re willing to give them that evidence to save yourself from being sued.”

Egan's evidence claims that Lynch and Hussain were behind a scheme to increase Autonomy's revenue in order to meet market expectations.

Read more: Autonomy founder 'inflated sales before HP deal'

“It was my impression that Mr Hussain was under even more pressure from Dr Lynch to achieve the revenue goals,” Egan said in a written witness statement.

“I recall a discussion with Mr Hussain in which he told me that if I thought there was a lot of pressure on me, it was even worse for him.

“Over time, that pressure led to the four types of transactions that…were used to meet revenue goals that were different from the standard software licensing and data hosting deals.”

Egan will continue giving evidence tomorrow.