Sunday, July 21, 2019
Home Tech the "trial of the century" in tech opens in London

the "trial of the century" in tech opens in London

This is the "trial of the century" in the technology sector for observers across the Channel. Mike Lynch, the former boss of software publisher Autonomy, is appearing before the British Supreme Court today.

He is accused, along with former CFO Sushovan Hussain, of disguising his company's accounting data and misleading Hewlett Packard, who acquired it in 2011 for $ 10.24 billion ($ 9 billion). euros).

HP is asking the two men for $ 5 billion in this lawsuit in 2015, one of the largest ever civil claims in Britain for damages. The verdict is expected at the end of the year, after a trial that should last nine months.

Meg Whitman, the former HP president whose testimony is expected, accuses former Autonomy executives of "accounting irregularities, misrepresentations and no disclosures" between 2009 and 2011. In other words to have inflated the company's revenues of approximately $ 700 million through fraudulent accounting transactions and fraudulent accounting methods.

An absurd price

Mike Lynch does not give a damn. If the operation proved to be one of the biggest fiascos in the history of tech, it is the fault of the leaders of HP, who have not managed to manage its integration. In a separate procedure, the one that was nicknamed at times the "British Bill Gates" besides claiming 150 million dollars to the Californian group for having damaged its reputation.

The acquisition of Autonomy had astonished the experts since its announcement, in the summer of 2011, by the ephemeral boss of Hewlett Packard Léo Apotheker – he was disembarked just after the operation. More than $ 10 billion, a premium of 60% compared to the stock market at the time, for a company whose revenues did not exceed one billion dollars? An "absurd" price for Oracle founder Larry Ellison, who reportedly refused to buy Autonomy a few months before HP.

The scandal broke out in November 2012, when HP's annual results were released. A little more than a year after the acquisition, the group charges a charge of $ 8.8 billion for impairment of assets … including $ 5 billion for Autonomy. Mike Lynch and other Alumni of the company are immediately disembarked. And both sides have been engaged in a fierce legal battle.

Criminal procedure in the United States

Mike Lynch, who personally received $ 815 million in the operation, has since made a name for himself. Through his fund Invoke Capital, he has notably invested in the unicorn of cybersecurity Darktrace or in the biotech Sophia Genetics, co-founded by the French Jurgi Camblong.

Renewal, however, may come to an end. First because HP is preparing to produce the testimony of a key figure, who could undermine his defense. Christopher Egan, who ran the business of Autonomy in the United States before its acquisition, would have "personally concluded many of the transactions that are precisely in question in this case" and would be prepared, according to the lawyers of HP, to testify against his former boss after deciding to collaborate with the US Department of Justice.

This is the other bad news for Mike Lynch: the existence of another procedure, this time criminal, on the other side of the Atlantic. On Friday, US prosecutors added three charges to the already existing fourteen, upsetting the strategy of his lawyers who deny the new allegations.

Doubts still surround the presence of Mike Lynch at his London trial, which opens on Monday. Perhaps it is better for the "British Bill Gates" to play at home: on the other side of the Atlantic, he now faces up to 25 years in prison.

Basil Dekonink

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