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Extradition could re-open investigation into the sale of Autonomy

A UK court has ruled that Mike Lynch, tech entrepreneur and founder of software firm Autonomy, could be extradited to the US to face charges of conspiracy and fraud in relation to the £7.1 billion sale of the tech business to Hewlett Packard (HP).

The extradition hearing had been adjourned to await the outcome of a ruling on a civil fraud lawsuit brought against Dr Lynch by HP, but on hearing that this ruling could be delayed by several months, the District Court Judge decided to reject the case, saying he did not believe extradition to be an abuse of process.

Autonomy was sold to HP in 2011 but soon after, Dr Lynch and his Chief Financial Officer, Sushovan Hussain, were accused of fraudulently inflating the value of Autonomy before the sale.

The Serious Fraud Office (SFO) dropped its investigation into the case in 2015, saying there was “insufficient evidence” for a conviction.

However, the US government has persisted in its argument that Dr Lynch should be prosecuted in the US, as “America was the location of intended victims of the fraud”.

If extradition proceedings go through, Dr Lynch faces trial in California and, if he is found guilty of the charges, could spend decades in prison.

Dr Lynch has always denied all charges and said he will appeal the decision, calling it “insane”.

Commenting on the case, Roger Isaacs, Forensic Partner at Milsted Landon, said: “If the extradition is upheld by the Home Office, all the evidence will need to be examined again and tailored to the US justice system, which works differently from the UK’s.

“Business valuations are never precise but the allegations suggest that there was a deliberate attempt to increase the value of Autonomy beyond anything that could have been justified if what is purported to be its true performance had been reflected in its accounts.”

It is therefore inevitable that forensic accountants will play a critical role in the next phase in these proceedings.

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