Americans set out to destroy my reputation after botched takeover, says Mike Lynch
Mike Lynch says HP used aggressive tactics, making him a scapegoat after it botched an £8.5bn takeover of his former firm Autonomy
Tech entrepreneur Mike Lynch has accused American giant HP of waging a vicious public campaign to destroy his reputation.
The 53-year-old, once dubbed ‘Britain’s Bill Gates’, says HP used aggressive tactics, making him a scapegoat after it botched an £8.5billion takeover of his former firm Autonomy.
The claims will be made today by his lawyers, as they set out his defence in a £3.8billion High Court battle. The civil case is the biggest fraud trial in English legal history. Lynch denies fraud.
HP accuses Lynch and other Autonomy executives of cooking the books at the company before it was sold in 2011.
The US firm wrote off most of Autonomy’s value a year later, blaming the alleged fraud.
However, Lynch’s lawyers argue his former business was driven into the ground by chaotic management at HP and that its allegations against him are desperate ‘makeweights’.
They say he was never given the chance to defend himself before the claims against him were taken public and that HP, under former boss Meg Whitman, ‘commenced an aggressive and co-ordinated press campaign’ before it had properly gathered evidence.
‘HP chose to shoot first and ask questions later,’ his defence says. ‘The choice of target appears to be motivated by the fact that Dr Lynch is wealthy and has a deep pocket for the purposes of this claim.
‘Further, the claimants need a high-profile target to blame for the losses that they suffered.’ Lynch’s lawyers claim the accusations by HP have damaged his reputation and his business interests, with the entrepreneur’s fund Invoke Capital losing out on deals.
Rather than fraud, Lynch’s lawyers argue the failure of Autonomy under HP’s control was down to poor business choices.
They say HP tried to abandon its takeover of Autonomy in the late stages but was blocked from doing so by the UK Takeover Panel.
It then ousted key executives who had orchestrated the deal, made abrupt changes in strategy, failed to expand Autonomy’s sales team, sidelined the firm’s products and was riven by boardroom arguments over the direction of the business, Lynch’s lawyers claim.
HP instead alleges Lynch was aware of efforts by executives at Autonomy to artificially inflate sales figures so that the company appeared to be more valuable than it really was.
On Monday and yesterday, the company’s lawyers said Autonomy’s bosses were so desperate to boost sales that they struck deals to sell products to customers but then bought equipment they did not need from them in return.
The trial continues.