Mike Lynch, the tech founder once hailed as Britain’s answer to Steve Jobs, denied wrongdoing at his fraud trial in connection with Hewlett-Packard’s disastrous US$11 billion ($16.65 billion) acquisition of his software company in 2011.
Under questioning from his lawyer, Christopher Morvillo, Lynch said he was not involved in the transactions that prosecutors say amounted to a massive accounting fraud at Autonomy, the company Lynch co-founded.
HP wrote down Autonomy’s value by US$8.8 billion in 2012, saying it had uncovered serious accounting improprieties.
Lynch took the witness stand at the San Francisco trial for the first time.
He told jurors that others were in charge of accounting, and he was focused on Autonomy’s technology and marketing.
The tech entrepreneur defended his company, saying that while Autonomy was not perfect and some things could have been done better in hindsight, it was still a lucrative business.
“I think Autonomy was an extremely successful company. From a financial point of view, it was highly profitable,” Lynch said.
The testimony is a pivotal moment for Lynch, who has been embroiled in legal battles over the sale since it imploded and now faces potential prison time if convicted.
Lynch and former Autonomy finance executive Stephen Chamberlain face charges of fraud and conspiracy for allegedly scheming to inflate the company’s revenue starting in 2009, in part to entice a buyer.
Prosecutors say the pair padded Autonomy’s finances through back-dated agreements and “round-trip” deals that fronted cash to customers through fake contracts.
At the trial that began in mid-March, jurors have heard from more than 30 government witnesses including Leo Apotheker, the former HP chief executive who was fired weeks after the Autonomy deal was announced.
Lynch’s legal team has argued at trial that HP was so eager to bag Autonomy and shut out potential competitors that it rushed through due diligence before the sale.
Lynch’s attorney said in opening arguments that the Cambridge-educated entrepreneur was focused on tech issues and left money matters to Sushovan Hussain, Autonomy’s then-chief financial officer.
Hussain was separately convicted in 2018 at a trial in the same court. He was released from U.S. prison in January after serving a five-year sentence.
Lynch was one of the UK’s leading tech entrepreneurs, drawing comparisons to Jobs, the Apple cofounder, as well as to Microsoft’s cofounder, Bill Gates.
In one of the biggest British tech deals at the time, the Autonomy buy was meant to fuel HP’s software business.
Instead, it spawned a series of bitter and expensive legal battles.
HP largely won a civil lawsuit against Lynch and Hussain in London in 2022, though damages have not yet been decided. The company is seeking US$4 billion.
At that trial, Lynch was on the stand for 20 days.
Lynch said HP did not know what it was doing with Autonomy, and was out of its depth in understanding his technology.