A criminal prosecution of Mike Lynch, the British tech entrepreneur, in the UK would result in severe delays, the US government argued today as it fought to extradite the Autonomy founder to be tried on fraud charges in America.
The UK’s Serious Fraud Office has reserved the right to prosecute the case if Lynch is successful in blocking his extradition to the US, where he is facing charges of securities fraud, wire fraud and conspiracy.
The charges relate to the 2011 acquisition of software firm Autonomy by tech giant Hewlett Packard (HP).
Following the sale, HP wrote down Autonomy’s value by $8.8bn and claimed Lynch, and the firm’s ex-finance chief Sushovan Hussain, had falsely inflated its revenue prior to the acquisition.
Alongside the US attempts for Lynch to face criminal charges, the tech entrepreneur is also waiting for the judgement in a separate civil fraud trial in the UK.
HP sued Lynch and Hussain for $5.1bn (£3.96bn) for allegedly falsely inflating Autonomy’s revenue prior to the 2011 sale.
Lynch denies all of the allegations.
Earlier this week Westminster Magistrates’ Court heard that it could take US authorities until mid-2023 to begin a criminal trial.
However Mark Summers QC, for the US Government, today said an SFO investigation would delay the case further.
“Any UK prosecution would take several years to get off the ground,” Summers said.
He said reviewing documents, bringing charges and accessing evidence and witnesses in America could all delay a potential prosecution further.
“The SFO needs to have reviewed these hundreds of millions pages [of documents] before it can bring any charges and it is only after it has done all that that a trial can be started. The SFO review is additional to all the other delays,” he added.
“The uncertainty in all of that is uncertainty that favours US extradition,” Summers said.
The extradition case between Lynch and the US government reached its climax this afternoon as both sides made their closing arguments in court.
Alex Bailin QC, for Lynch, argued the alleged loss and harm had occured in the UK, as Autonomy was a London-listed company.
In his closing statement he said HP acquired the company through a Dutch special purpose vehicle, using $7.9bn of offshore money, and paid for the software firm in pound sterling.
He also cited Lynch’s connections to the UK – that he was born and lived in the country for the whole of his life – as evidence against extradition.
However Summers, for the US government, countered that the loss and harm had directly impacted HP, which is based in the US.