Court documents show that the OEM is accusing former Autonomy CEO Mike Lunch and Finance Director Sushovan Hussain of fraud.
BBC News reported on the “new details” revealed in HP’s UK case against Autonomy. The Recycler reported in April on the new legal battle between HP and Lynch, alongside Hussain, with the OEM filing a claim for $5.1 billion (€4.7 billion) in damages at the UK High Court in the chancery division against the two men, marking the “first time the company has taken direct action against [them]”. The OEM stated that the lawsuit “seeks damages from [Lynch and Hussain] of approximately $5.1 billion.
The OEM acquired Autonomy in 2011, but wrote down its worth in November 2012, claiming that “accounting fraud and inflated financials” from Autonomy officials, including Lynch, were to blame, and HP’s shareholders sued HP for mismanagement, though a settlement was announced in June 2014 and secured in March this year. The UK Serious Fraud Office closed its investigation into the circumstances of the acquisition in January this year, and “ceded legal jurisdiction to US authorities”.
The court documents reveal that HP accused Lynch and Hussain of “artificially inflating” Autonomy’s revenue before HP purchased it, and the OEM added that “just before it decided to acquire Autonomy, it believed that the firm was growing rapidly, on the basis of documents that HP now says showed artificially inflated revenue and profit figures”.
HP believes that Autonomy’s revenues “were 25 percent lower than it reported in 2009, 38 percent lower in 2010, and 36 percent lower in 2011”. As a result of the “inflated figures”, it claims that it “overpaid for Autonomy” by around $5.1 billion, “the rough amount it is now seeking to recover” from Lynch and Hussain. BBC added that the claim is “one of the largest damages claims ever brought against an individual in the UK”.
Lynch has responded by noting that HP is “looking for a scapegoat”, and that its claims were “baseless”. His statement added that HP’s case is “a simple rehash of previous leaks and insinuations that add up to one long disagreement over accounting treatment”. In turn, he alleged that the case is an attempt by HP CEO Meg Whitman to find a “scapegoat for [HP’s] own errors and incompetence”.