(Bloomberg) -- Hewlett Packard Enterprise Co. is seeking as much as $4 billion from Autonomy Corp.’s former bosses following a London judge’s finding that they fraudulently boosted the value of the company before its sale.
Founder Mike Lynch was found to have inflated Autonomy’s revenue alongside his chief financial officer Sushovan Hussain and induced HP to buy the firm for $11 billion, according to a London civil judgment in 2022.
The British tech tycoon is currently waiting to face a criminal trial in the US over the sale after being extradited last year. He was previously investigated by the UK’s Serious Fraud Office but the agency dropped its case. Hussain was convicted in the US for his role in the saga.
Lawyers for HP calculated the total losses that Lynch and Hussain must pay back as over $4 billion, according to court documents prepared for a hearing Monday. This was revised from a previous calculation of $5 billion at trial due to further evidence.
“The fraud was consistent and clear: to inflate Autonomy’s ostensible software revenues,” said Conall Patton, HP’s lawyer, in the documents. The company sought to “maintain its reputation as a highly successful pure software company with beat-and-raise financial results and so ultimately to sustain its share price.”
Lawyers for Lynch argued that even if accurate information had been given, HP would have still purchased Autonomy. They said the loss amount should be the difference between the price paid in a “counter-factual world” and the actual price.
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The nine-month, £40 million ($50 million) civil trial was among the longest and most expensive in modern British history. The judge described the length of his ruling as “unparalleled” and cautioned that the final amount of damages awarded was likely to be “substantially less” than HP had claimed, he said.
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