British tech founder Mike Lynch denies defrauding HP at US criminal trial

British entrepreneur Mike Lynch leaves Westminster Magistrates Court, in London, Britain, February 9, 2021. REUTERS/Hannah McKay/File Photo

SAN FRANCISCO (Reuters) -Mike Lynch, the tech founder once hailed as Britain's answer to Steve Jobs, denied wrongdoing at his fraud trial on Thursday in connection with Hewlett-Packard's disastrous $11 billion acquisition of his software company in 2011.

Under questioning from his lawyer, Christopher Morvillo, Lynch said he was not involved in the transactions that prosecutors say amounted to a massive accounting fraud at Autonomy, the company Lynch co-founded.

HP wrote down Autonomy's value by $8.8 billion in 2012, saying it had uncovered serious accounting improprieties.

Lynch took the witness stand at the San Francisco trial for the first time earlier on Thursday. He told jurors that others were in charge of accounting and he was focused on Autonomy's technology and marketing.

The tech entrepreneur defended his company, saying that while Autonomy was not perfect and some things could have been done better in hindsight, it was still a lucrative business.

"I think Autonomy was an extremely successful company. From a financial point of view, it was highly profitable," Lynch said.

The testimony is a pivotal moment for Lynch, who has been embroiled in legal battles over the sale since it imploded and now faces potential prison time if convicted.

Lynch and former Autonomy finance executive Stephen Chamberlain face charges of fraud and conspiracy for allegedly scheming to inflate the company's revenue starting in 2009, in part to entice a buyer.

Prosecutors say the pair padded Autonomy's finances through back-dated agreements and "round-trip" deals that fronted cash to customers through fake contracts.

At the trial that began in mid-March, jurors have heard from more than 30 government witnesses including Leo Apotheker, the former HP chief executive who was fired weeks after the Autonomy deal was announced.

Lynch's legal team has argued at trial that HP was so eager to bag Autonomy and shut out potential competitors that it rushed through due diligence before the sale.

Lynch's attorney said in opening arguments that the Cambridge-educated entrepreneur was focused on tech issues and left money matters to Sushovan Hussain, Autonomy's then-chief financial officer.

Hussain was separately convicted in 2018 at a trial in the same court. He was released from U.S. prison in January after serving a five-year sentence.

Lynch was one of the UK's leading tech entrepreneurs, drawing comparisons to Jobs, the Apple cofounder, as well as to Microsoft's cofounder, Bill Gates.

In one of the biggest British tech deals at the time, the Autonomy buy was meant to fuel HP's software business. Instead, it spawned a series of bitter and expensive legal battles. HP largely won a civil lawsuit against Lynch and Hussain in London in 2022, though damages have not yet been decided. The company is seeking $4 billion.

At that trial, Lynch was on the stand for 20 days.

Lynch said HP did not know what it was doing with Autonomy, and was out of its depth in understanding his technology.

(Reporting by Jody Godoy in New York and Abhirup Roy in San Francisco; Editing by Matthew Lewis)

Follow us on our official WhatsApp channel for breaking news alerts and key updates!


Next In Tech News

Tempus AI shares jump 8% in Nasdaq debut
Meta pauses AI models launch in Europe due to Irish request
Adobe surges as AI optimism fuels annual revenue forecast
Microsoft to invest $7.16 billion in new data centres in northeastern Spain
Bitcoin miners pivot to South-East Asia after�China crackdown
China elder care sector plugs smart gadgets to fill workforce gaps
French tech firms warn immigration curbs could threaten AI ambitions
Chinese football fans are pouring money into a food stall run by Singapore’s goalkeeper. Here’s why
How Amazon blew Alexa’s shot to dominate AI, according to more than a dozen employees who worked on it
Mark Zuckerberg’s ‘year of efficiency’ at Meta has spread to the company’s upper ranks and incompetent VPs are next to be culled

Others Also Read