HP Autonomy fraud trial begins
HP suing directors of software company for $5bn for fraud
Legal action by HPE against the former directors of software company Autonomy has reached the UK High Court.
HP is suing Autonomy founder Mike Lynch and CFO Sushovan Hussain for $5bn over the failed purchase of the data and analytics company.
The civil action is likely to be the biggest ever fraud trial in the UK.
HP bought Autonomy for $11.7bn in 2011, but the merger of the two companies failed, causing HP to write off $8.8bn of the investment a year later. HP later sold the remaining assets of Autonomy in 2016.
The acquisition of Autonomy, which made data and information governance software related to unstructured data was one of the largest tech acquisitions of a UK company at the time.
Soon after the acquisition, Autonomy executives began leaving HP, and HP then accused Autonomy directors of inflating the value of the company before the sale. HP launched civil and criminal proceedings against Lynch and Hussain.
Both directors deny the claims, saying that HP mismanaged the merger, and that differences in financials are down to differences in accounting practices between the US and UK.
Lynch also faces criminal charges in the United States, while Hussain was found guilty of 16 counts of fraud in the US last year. He has yet to be sentenced, but could face 20 years imprisonment for each offence.
The UK civil case is expected to last until December.