(qlmbusinessnews.com Tues, 13th Feb, 2024) London, UK —
“Hewlett-Packard's $4 Billion Loss: London Court Unravels Autonomy Acquisition Fraud”.
Hewlett-Packard (HP) faced a staggering loss of more than $4 billion (£3.2 billion) following its acquisition of British software firm Autonomy, as revealed in a London court on Monday. According to HP's legal team, this substantial loss was a result of an intricate fraud orchestrated by Autonomy's co-founder, Mike Lynch, aimed at artificially inflating the company's value.
Hewlett-Packard Enterprise (HPE) has taken legal action against Lynch, once celebrated as Britain's equivalent to Bill Gates, and Autonomy's former chief financial officer, Sushovan Hussain, seeking to recover its losses. The US tech giant had acquired Autonomy for $11.1 billion in 2011, marking one of the largest tech deals in the UK. However, the acquisition turned sour swiftly, with HPE writing down Autonomy's value by a staggering $8.8 billion within a year.
Following an extensive civil trial in English legal history, HPE emerged substantially victorious in 2022, although the high court judge noted that damages would be considerably lower than the $5 billion initially claimed by HPE. HPE's legal team argued in court on Monday that the losses incurred due to the fraud amounted to around $4 billion.
However, Lynch, who was extradited to the US last year to face criminal charges related to the deal, maintains that HPE suffered no real loss and vehemently denies any involvement in fraudulent activities. Lynch's lawyer, David Wolfson, contended in court filings that the price HPE would have paid for Autonomy would not have significantly differed, citing Autonomy's unique technology and HPE's strategic motives for the acquisition.
Lynch plans to seek permission to appeal against the 2022 ruling, which has been postponed until after the determination of damages. Lawyers representing Hussain, who was previously convicted of fraud in the US and sentenced to five years in prison in 2019, affirmed his alignment with Lynch's defence.
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