HP sues former Autonomy leaders for $5.1bn, alleging fraud

HP sues former Autonomy leaders for $5.1bn, alleging fraud

Source: www.bbc.co.uk


Hewlett-Packard (HP) is suing Autonomy co-founder Mike Lynch and former chief financial officer Sushovan Hussain for about $5.1bn (£3.4bn).

HP is suing for alleged fraud. Separately, Mr Lynch and the former management of Autonomy plans to sue HP for more than £100m, alleging “false and negligent statements”.

US-based HP bought software firm Autonomy in 2011 for $11bn.

HP later wrote down the value of its purchase by three quarters.

Industry observers suggested there may have been problems with due diligence before Autonomy was bought. HP purchased Autonomy with the aim of moving more into software.

But shortly after buying it, HP claimed it had been misled by Autonomy as to the firm’s true value.

Earlier this year, the Serious Fraud Office closed its investigation into Autonomy’s sale, saying that “on the information available to it, there is insufficient evidencefor a realistic prospect of conviction.”

It ceded legal jurisdiction to US authorities. Mr Lynch and Mr Hussain have consistently denied any allegation of impropriety.

UK claim

HP said in an emailed statement that: “HP can confirm that, on 30 March, a Claim Form was filed against Michael Lynch and Sushovan Hussain.

“The lawsuit seeks damages from them of approximately $5.1 billion. HP will not comment further until the proceedings have been served on the defendants,”

HP said it had filed its claim in London’s Chancery Division High Court.

Meanwhile, representatives for Mr Lynch and his colleagues said in a separate statement: “The former management of Autonomy announces today they will file claims against HP.

“Former Autonomy CEO Mike Lynch’s claim, which is likely to be in excess of £100 million, will be filed in the UK.”

Late last summer, Autonomy filed papers in a San Francisco court accusing HP of “mismanagement” of the takeover.

Autonomy’s former chief financial officer, Sushovan Hussain, said then that HP wanted to “cover up its mismanagement of the Autonomy integration”.

At the time HP dismissed Mr Hussain’s complaint as “preposterous”.