Former Autonomy boss charged with fraud in the US
Former Chief Executive of Autonomy, Michael Lynch and his Vice President for Finance, Stephen Chamberlain, have been formally charged with fraud in the USA. The charge, which carries a maximum term of 20 years, relates to the sale of Autonomy in 2011 to computer giant, Hewlett Packard.
The sale was worth £8 billion ($10.3 billion) and was heralded as a runaway British success story. However, according to the charges, between 2009 and 2011, Mr Lynch and Mr Chamberlain, along with other co-conspirators, artificially inflated Autonomy’s revenues by overstating them. They are also accused of making misleading statements to regulators and market analysts covering the firm. Autonomy’s former Chief Financial Officer, Sushovan Hussain, was found guilty of accounting fraud earlier this year.
The charge sheet says that the alleged fraudsters “intimidated, pressured and paid-off persons who raised complaints about or openly criticised Autonomy’s finance practices and performance”.
Lawyers for Mr Lynch have called the indictment a travesty, saying that it should not have been brought in the US, as it targets a British citizen with “rehashed allegations about a British company regarding events that occurred in Britain a decade ago”.
However, Hewlett Packard has praised the indictment, with a spokesman for the firm saying that the facts uncovered during the course of the matter will “further demonstrate the harm that was caused by Dr Lynch, Mr Chamberlain, Mr Hussain and others to HP.”
The ‘facts uncovered’ will have come through a forensic examination of every piece of evidence relating to the sale in the years leading up to it. These will include money transfers, emails, bank accounts, telephone transcripts and witness statements. Forensic investigators will have pieced all these fragments of evidence together to form a picture, which the prosecutors evidently believe is strong enough to mount the indictment.
Roger Isaacs, Partner at Milsted Langdon, said: “Forensic accountants and investigators are often the first port of call in cases involving accounting fraud and other similar crimes.
“These experts will closely examine all sorts of information in their efforts to get to the bottom of a complex case.”
Author: Roger Isaacs 3 December 2018