Mike Lynch, the founder of the British software firm Autonomy, today said he has sued Hewlett-Packard, the company that acquired it in 2011, in the U.K. High Court in London for $150 million in damages for what he called “statements that were highly damaging to me and misleading to the stock market.”
Autonomy Founder Lynch Sues Hewlett-Packard in U.K. for $150 Million
The billionaire is countersuing over “false and misleading statements” made by the computing giant against him.
Re/code
Lynch is countersuing HP, which filed its own $5 billion lawsuit against him and former Autonomy CFO Sushovan Hussain in March. In the complaint, Lynch argues that all of HP’s claims against him saying that he mismanaged Autonomy in order to artificially inflate its value are false and should be rejected.
HP acquired Autonomy in a deal worth about $11 billion in August of 2011, but within a year of closing said it had been misled by Lynch and Hussain into overpaying for the company by about $5 billion. It included that amount in a write-off of nearly $9 billion it announced in November of 2012.
Lynch argued in a statement that HP mismanaged Autonomy after taking it over, and said that HP’s own documents will prove this out in court. He also said that, ahead of the closing, HP executives failed to read a due diligence report on Autonomy that raised questions about some of its accounting methods.
HP has alleged that Autonomy engaged in numerous instances of what it calls “contrived transactions” that were devised in order to book revenue improperly or were entirely fabricated. In some cases, HP says, Autonomy used third parties known as Value Added Resellers or VARs to “fabricate or accelerate” sales that were reported as revenue by Autonomy. It also says that Autonomy improperly reported sales of computing hardware as software.
The case is also a pending criminal matter. While the U.K.’s Serious Fraud Office closed its investigation in January without bringing charges, it also ceded its jurisdiction in the matter to the U.S. Department of Justice, which is still actively investigating.
Update: In an emailed statement, HP called the suit “a laughable and desperate attempt to divert attention from the $5 billion lawsuit HP has filed and the ongoing criminal investigation. HP anxiously looks forward to the day Lynch and Hussain will be forced to answer for their actions in court.”
This article originally appeared on Recode.net.
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