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Former CEO of Autonomy Mike Lynch walking out of the Court (Image via The New York Times)
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Hewlett-Packard's (HP) acquisition of British software maker Autonomy for $11 billion was considered one of the biggest successful deals of 2011. However, the strategic partnership did not thrive for long as HP accused Autonomy of engaging in fraudulent financial practices, inflating the company's valuation from $8 billion to $11 billion.
Mike Lynch, the former CEO, and Sushovan Hussain, the former Chief Financial Officer of Autonomy, are facing charges for fraudulent activities. They have said in their defence that HP has been using them as "scapegoats" to cover up the faults of the management who were involved in the process of buying Autonomy in 2011.
Meg Whitman, ex-CEO of Hewlett-Packard Enterprises (HPE), who joined in 2011, was accused by Lynch in the UK trial of having been involved in the acquisition process and said that she was unable to handle the merger at that time. Lynch also raised the matters of discrimination and mishandling of the Autonomy employees, but the complaints were paid no heed by Whitman.
Meg Whitman removes Leo Apotheker amidst Autonomy Acquisition Fallout
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Whitman, after taking the lead at HP, decided to remove Leo Apotheker, the Chief Executive of HP, who was the main head behind the autonomy deal. A spokeswoman for Apotheker said “HP’s acquisition of Autonomy had the full support of the HP board of directors, who endorsed it unanimously on the basis of thorough due diligence. The fact that every member of the board stood behind the transaction at the time it was announced is clear from the proceedings in the high court,” as said by The Guardian.
Mike Lynch as well as the ex-chief financial officer of Autonomy are both facing trial on the charges of fraud and conspiracy. They will receive a sentence of 20 years in jail if they are proven guilty. Sushovan Hussain has been serving his 5-year sentence since May 2019, after he was found guilty on the grounds of conspiracy.
HP is looking forward to winning the UK civil trial case, as they previously won the civil fraud case trial against Mike Lynch and Sushovan Hussain in 2022, which the London High Court heard. Whereas, Mike Lynch has still been trying to prove himself innocent. By the month of May or June, a judgment is expected to be passed, putting an end to this 13-year-old case.
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