The Autonomy founder Mike Lynch has hit back in his bitter feud with Hewlett-Packard, launching a $160m (£106m) counter-claim over allegations of fraud following the ill-fated $11.1bn takeover of the Cambridge-based software company.
Mr Lynch claimed HP made “false and negligent statements” about him that led to reputational damage and meant he has been unable to pursue business opportunities since leaving Autonomy. Mr Lynch claimed talks with potential investors in his new venture Invoke Capital have fallen through as a result. He estimates he would have pocketed at least $160m through “considerable equity gains and fees”.
HP is suing Mr Lynch and Autonomy’s former chief financial officer, Sushovan Hussain, for $5.1bn in one of the largest-ever civil lawsuits against British nationals, after it wrote down the value of the disastrous acquisition in 2012 by $8.8bn. HP alleged that $5.5bn of that figure was due to “accounting misrepresentations”.
Last week, documents released by Mr Lynch and Mr Hussain revealed the concerns of some of the former HP management about the Autonomy takeover before the deal was made public. On the eve of the announcement, HP’s then chairman Ray Lane is alleged to have called an emergency board meeting at which the chief financial officer Cathie Lesjak is said to have voiced her objections to the acquisition.
The due-diligence report prepared by the accounting firm KPMG for HP also made clear the differences in accounting policies on either side of the Atlantic.
Mr Lynch said: “Over the past three years, HP has made many statements that were highly damaging to me and misleading to the stock market. Worse – HP knew, or should have known, these statements were false.
“HP’s own documents, which the court will see, make clear that HP was simply incompetent in its operation of Autonomy, and the acquisition was doomed from the very beginning.”
He added: “HP wasn’t misled by us or anyone else; evidence will show they didn’t even read their own due- diligence report. Tragically, Autonomy is only one deal among the many that were mishandled by HP, which has written down $9bn on three separate occasions since 2011. Every acquisition over a billion dollars that HP has made in the last five years has failed.”
HP could not be reached for comment.
