Tuesday, February 27, 2024

Hewlett-Packard lost $4bn over Autonomy acquisition, London court told

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Hewlett-Packard lost more than $4bn (£3.2bn) over its acquisition of British software firm Autonomy because of an elaborate fraud masterminded by its co-founder Mike Lynch to inflate the company’s value, its lawyers told a London court on Monday.

Hewlett-Packard Enterprise (HPE) is seeking to recoup losses in a lawsuit brought against Lynch, once hailed as Britain’s answer to Bill Gates, and Autonomy’s former chief financial officer, Sushovan Hussain.

The US technology company bought Autonomy for $11.1bn in 2011, in one of the UK’s biggest tech deals. But the deal spectacularly unravelled, with HPE writing down Autonomy’s value by $8.8bn within a year.

After one of the longest civil trials in English legal history, HPE in 2022 substantially won its case, though a high court judge said any damages would be significantly less than the $5bn HPE had claimed.

HPE’s lawyers argued on Monday that its losses resulting from the fraud entitle it to about $4bn.

But Lynch – who last year was extradited to the US to face criminal charges over the deal, with a trial due to start next month – argues HPE suffered no real loss. He denies any wrongdoing.

His lawyer, David Wolfson, said in court filings that the price HPE would have paid “would not have been materially different”, in part because of Autonomy’s unique technology and HPE’s strategic rationale for the acquisition.

Lynch intends to seek permission to appeal against the 2022 ruling, which has been delayed until after the determination of damages, his lawyers previously said.

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Lawyers representing Hussain, who was convicted of fraud in the US and sentenced to five years in prison in 2019, said he agreed with Lynch’s case.

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