HP preparing to sue Autonomy chief for fraud
Former Autonomy finance chief Sushovan Hussain and Autonomy founder and chief executive Mike Lynch will face legal action from HP, in relation to its ill-fated acquisition of Autonomy for $11.1bn (£6.6bn) in 2011.
HP’s shareholders initially sued the computer giant over its $8.8bn write down on Autonomy, made just a year after the deal closed. HP settled with its shareholders in April and said in a court filing that they instead would pursue the former Autonomy executives in court along with HP.
“The shareholder plaintiffs who originally sued HP’s directors and officers now agree that Hussain, along with Autonomy’s founder and chief executive, Michael Lynch, should be held accountable for this fraud,” said HP in its filing, adding that they had inflicted: “billions of dollars of harm.”
Hussain is trying to block the settlement between HP and its shareholders, saying HP officials were wrongly absolved and the company is trying to cover up its own failings.
“This breathless ranting from HP is the sort of personal smear we’ve come to expect,” said a spokesperson for Lynch, Hussain and the Autonomy management. “As the emotional outbursts go up, the access to facts seems to go down. HP has struck a corrupt and collusive settlement to try to bury the truth rather than face a court. Meg Whitman [HP’s chief executive] 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. Quite simply we are asking for discovery and facts, they are trying to hide them – that’s what separates us and her.”
HP alleges that Autonomy inflated its revenue and profit by as much as 81 per cent before HP bought it. Autonomy reported profit after tax of £105.7m in 2010, but this figure was revised down to just £19.6m in the most recent accounts filed by HP.
Autonomy is also at the centre of fraud investigations by the Serious Fraud Office and the US Department of Justice.