Mike Lynch, the British tech tycoon lacking after his luxurious yacht sank off the coast of Sicily, had solely not too long ago fended off a US felony fraud case over the sale of his software program firm to Hewlett Packard Co.
Lynch, 59, and his spouse have been aboard the yacht, named Bayesian after a British mathematician, with a small group of his monetary and authorized advisers when the violent storm hit. They have been celebrating Lynch’s tumultuous acquittal simply over two months earlier, when a San Francisco jury discovered him not responsible of expenses that he duped HP into overpaying for his software program agency, Autonomy Corp.
Hailed at instances as “Britain’s Invoice Gates,” Lynch has been in search of to revive his status as one in all Europe’s most profitable entrepreneurs. For years, he’d argued that he had been scapegoated over the acquisition. HP paid $11 billion for Autonomy in 2011, solely to jot down down $8.8 billion of the acquisition value a 12 months later.
However even after his acquittal on felony expenses, Lynch was nonetheless combating the Silicon Valley big in a civil case in London, the place a British choose held him answerable for creating the phantasm of an organization a lot bigger and extra profitable than it actually was.
Autonomy’s success — its software program might extract helpful data from unstructured sources together with cellphone calls, emails and video — made Lynch one of many best-known British expertise executives. He was named Entrepreneur of the Yr by the Confederation of British Trade in 1999. In 2000, Time journal named him one of many 25 most influential expertise leaders in Europe.
Suggested Prime Ministers
He was awarded an Order of the British Empire for providers to enterprise in 2006. The identical 12 months, he was appointed as non-executive director to the board of the British Broadcasting Corp., the world’s greatest public broadcaster. He suggested two British prime ministers, David Cameron and Theresa Might.
Lynch made at the least $500 million from the HP deal. He then arrange enterprise capital agency Invoke Capital, founding a collection of tech corporations run by former staff. Probably the most profitable was Darktrace Plc, a cybersecurity enterprise that makes use of AI to detect suspicious exercise in an organization’s IT community. Forbes journal estimated his web value to be $1 billion in 2015, the only real 12 months he was named to its record of world billionaires.
HP, together with US prosecutors, alleged that Lynch and Autonomy’s former finance chief used accounting methods to inflate the corporate’s income forward of the 2011 sale.
The San Francisco trial positioned enormous pressures on the tech founder, who was pressured to put on an ankle monitor and confined to 24-hour supervision by personal safety guards he needed to pay for. On the stand, Lynch claimed ignorance of a number of the wrongdoing attributed to him, saying he delegated key selections to underlings.
Autonomy “wasn’t good,” Lynch testified on the trial. “The truth of life is that it’s nuanced and it’s messy and generally you do your greatest to get by means of it. And firms are identical to that.” When the decision got here, following two days of deliberations, Lynch hugged his lawyer and wiped his eyes.
HP’s acquisition of the corporate was initially seen as a validation of UK expertise and the Cambridge “Silicon Fen” tech cluster the place Autonomy was based mostly. However in 2012, HP publicly accused Autonomy and its executives of accounting failures. The lawsuit adopted. Lynch selected to struggle the civil trial with HP in London earlier than going through a US jury within the hope {that a} ruling on dwelling soil would assist his case.
In 20 days of testimony within the UK civil case, he served up a litany of anecdotes aiming for instance that HP was riven with govt turmoil and infighting as the corporate changed its chief govt officer and pivoted on technique shortly after the disastrous Autonomy deal.
He largely succeeded. Paperwork confirmed HP executives turning on one another — with HP CEO Meg Whitman, the onetime candidate for governor of California and present US ambassador to Kenya, saying she’d be ready to throw her predecessor Leo Apotheker “underneath the bus in a tit for tat.” Taking on simply as HP closed the Autonomy deal, Whitman sought to focus the agency again on its core PC unit to raised handle the sprawling enterprise.
However after one of many longest and costliest trials in British historical past, Decide Robert Hildyard dominated in 2022 that Lynch and Autonomy had fraudulently boosted the worth of the corporate. “One of many tragedies of the case is obvious: an modern and ground-breaking product, its architect and the corporate will most likely at all times be related to fraud,” the choose stated within the ruling.
Damages Pending
The choose was nonetheless to determine the damages Lynch must pay. HP was in search of $4 billion from him and his finance chief, however the choose had cautioned that it was more likely to get considerably lower than that.
These looming penalties from the civil go well with didn’t dent Lynch’s ambitions as soon as he was launched from home arrest within the US.
“I’m wanting ahead to returning to the UK and getting again to what I really like most: my household and innovating in my area,” Lynch stated in an announcement after the California jury cleared him of felony wrongdoing.