The Channel logo

News

By | Paul Kunert 12th June 2013 14:58

Probe into Autonomy allegations could take years - report

Mike Lynch splashing cash on m'learned friends

The federal probe into the alleged book-cooking at Autonomy prior to its acquisition by HP could take years to play out, according to reports.

This will not be music to the ears of Mike Lynch, former CEO of Cambridge-based Autonomy, who stands accused, along with his fellow directors, of deceptive accounting irregularities that HP claims inflated the company's sale price.

Lynch has repeatedly denied the claims and called on HP, which forked out $10.7bn for the analytics player in August 2011, to expand on the allegation.

But last autumn, HP wrote down Autonomy to the tune of a whopping $8.8bn, claiming it had found "accounting improprieties, disclosure failures and outright misrepresentations".

HP said the alleged shenanigans resulted in the company paying $5bn too much for Lynch's lot.

The case was handed late last year to the US Justice Department, the SEC and, closer to home, the UK Serious Fraud Office picked it up and are examining the allegations.

But sources close to the FBI investigation into the alleged fraud told the Daily Mail that it could take years before the case is put before a judge.

"We now think this will drag on for a couple of years," said a loquacious person familiar with the matter.

A series of explosive emails supposedly emerged when Lynch, who pocketed £500m from selling his firm, and his generals left the business.

Lynch has used some of that cash to pay for Reid Weingarten, of high profile law firm Steptoe & Johnson, to act as his counsel. The legal outfit has previously defended film director Roman Polanski.

But as previously revealed by The Channel, HP's shareholders are also feeling litigious, and calling on the firm to boot out board members who worked at HP when it gave the green light to the Autonomy deal.

A total of 10 lawsuits have been filed in the US. ®

comment icon Read 8 comments on this article alert Send corrections

Opinion

The full Spanglish breakfast: mealy pudding, bacon, black pudding, sausages, fried egg, toast
Blood image

Trevor Pott

Can the storage giant overcome a lack of necessary leadership?

Chris Mellor

Why overlapping kit from a merger equals a disaster in waiting
management cloud2

Gavin Clarke

The executioner turns gambler as HP's PCs are set to go

Features

No, silly... he was the fall guy for years of Finnish folly
Fraud image
Frodo and the Ring
Microsoft's strategy is to make Store apps popular. Good luck with that