Hewlett Packard, also known as HP, recently won a fraud case involving a company it bought for $11 billion in 2011. The British software business Autonomy was defrauded and sold to HP for a considerably higher price than it was worth.
Autonomy’s founder and former chief financial officer, Mike Lynch, had been sued by the laptop maker, alleging that they “artificially inflated Autonomy’s stated sales, revenue growth, and gross margins.”
On Friday of this week, the British judge overseeing the case determined that HP was correct in its statements. Lynch had masterminded an intricate deception to inflate the value of his firm Autonomy before it was purchased by Hewlett-Packard, it was finally uncovered. Lynch was well aware that his company’s activities were unethical, that its accounts were fake, and that its revenue recognition was incorrect.
This made Autonomy’s acquisition one of the most significant in the tech industry at the time.
Lynch will now be extradited to the United States, where he will face criminal accusations that could result in a sentence of up to 20 years in jail. Lynch’s attorneys confirmed that he intends to challenge both the judge’s ruling and the extradition order.
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Judge Robert Hildyard said HP had won most of the civil proceedings against Lynch, but HP’s damages would be significantly less than the $ 5 billion it was seeking.