Then, in March of this year, HP filed a claim against Lynch and Autonomy’s former chief financial officer Sushovan Hussain for £3.4 billion. Mr Lynch claimed talks with potential investors in his new venture Invoke Capital have fallen through as a result.
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The purchase of Autonomy was supposed to be the linchpin of a strategy to thrust the computer maker into software, but the deal soured quickly with HP eventually writing off three-quarters of the $11.7 billion it paid for Autonomy.
The Financial Times reported that Lynch’s filing says: “The fact that HP’s impairment calculation fluctuated by such large sums in the days before the calculation was finalized show that HP’s calculation was based (at least in part) on broad, subjective judgments on the part of HP’s top executives”.
HP, naturally, says it’s all bollocks, and that it’s pressing ahead with the $5bn lawsuit it has filed against Lynch and former Autonomy CFO Shushovan Hussain.
A due diligence report on Autonomy prepared by KPMG highlighted the differences in accounting practices between the U.S. and the United Kingdom and appeared to warn HP that Autonomy’s growth figures would be lower if USA standards were applied. A little more than a year later it wrote the value of its acquisition down by a staggering $8.8bn. “HP knew, or should have known, these statements were false”.
He believes that HP acted incompetently over the acquisition and that caused the relationship to fall apart.
‘Dr Lynch has suffered significant reputational damage and been unable to pursue business opportunities available to him following his departure from Autonomy, ‘ documents lodged at the High Court yesterday said.
Usually when people go nuts on an HP CEO, they’re talking about Carly Fiorina, but Lynch is out for blood with Whitman.
Across the Atlantic, the long and drawn out legal proceedings finally came to an end in January of this year, when the U.K.’s Serious Fraud office announced there was insufficient evidence to secure a conviction against Lynch.
“Mike Lynch’s lawsuit is a laughable and desperate attempt to divert attention from the $5 billion lawsuit HP has filed and the ongoing criminal investigation”, a company spokesperson said.
Lynch argued in a statement that HP mismanaged Autonomy after taking it over, and said that HP’s own documents will prove this out in court.
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Lynch claims he raised all of these issues with CEO Meg Whitman and that on several occasions she said she would take steps to address them, but never did.
