A long-running legal battle described as the UK tech trial of the century will reach the High Court in London today.
The dispute pitches American IT giant Hewlett-Packard (HP) against Mike Lynch, the British man who founded the software development company Autonomy.
“The civil trial is one of the largest damages claims in English legal history and is expected to finish at the end of the year,” says The Daily Telegraph.
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Who is Mike Lynch?
Lynch is a British entrepreneur who grew up in Essex and graduated from Cambridge with a PhD in electrical science before becoming one of the most celebrated tech entrepreneurs in the country. He founded Lynett Systems, which produced audio products for the music industry, in the late Eighties, then set up Cambridge Neurodynamics, a tech company specialising in finger-print recognition, in 1991, before co-founding Autonomy Corporation in 1996.
He served as chief executive of Autonomy for 15 years. During this time he was named Entrepreneur of the Year by the Confederation of British Industry, received an OBE for services to enterprise and was hailed as “Britain’s Bill Gates”.
Why is his reputation at stake?
Autonomy was bought by HP for £8.4bn in 2011. “But within months, the deal had soured. One year after the acquisition, HP wrote off almost the entire value of Autonomy and Lynch was fired,” says the Telegraph.
HP is now suing Lynch and the former Autonomy chief financial officer, Sushovan Hussain, for £3.8bn, alleging that they inflated the firm’s value before selling it. Both Lynch and Hussain deny the claims. The entrepreneur is counter-suing HP for more than £110m in damages for allegedly smearing his reputation.
Is he facing any criminal charges?
Yes. The US Department of Justice filed 14 counts of wire fraud and conspiracy against Lynch and his former vice-president of finance, Stephen Chamberlain, last November.
Just as Lynch was preparing to fight this week’s civil case in the UK, the US lodged fresh criminal charges against him. The new indictment includes another count of conspiracy to commit wire fraud, one count of securities fraud and one of conspiracy to commit securities fraud.
The Financial Times says that the new charge of securities fraud carries a potential prison sentence of 25 years.
Hussain, meanwhile, was found guilty of 16 counts of accounting fraud in the US last year and is awaiting sentencing. He apparently intends to appeal.
A spokesman for Lynch said: “These are baseless, egregious charges issued on the eve of the trial in the UK, where this case belongs, and Dr Lynch denies them vigorously.”
