HP Seeks $4 Billion in Losses From Lynch Over Autonomy Fraud

HP is seeking as much as $4 billion from Autonomy's former bosses following a London judge's finding that they fraudulently boosted the value of the company before its sale. From a report: Founder Mike Lynch was found to have inflated Autonomy's revenue alongside his chief financial officer Sushovan Hussain and induced HP to buy the firm for $11 billion, according to a London civil judgment in 2022. The British tech tycoon is currently waiting to face a criminal trial in the US over the sale after being extradited last year. He was previously investigated by the UK's Serious Fraud Office but the agency dropped its case. Hussain was convicted in the US for his role in the saga. Lawyers for HP calculated the total losses that Lynch and Hussain must pay back as over $4 billion, according to court documents prepared for a hearing Monday. This was revised from a previous calculation of $5 billion at trial due to further evidence.

Hewlett Packard Enterprise

[Cyrano de Maniac]

HP, Inc. (HPQ) and Hewlett Packard Enterprise (HPE) are completely separate, independent companies, which happen to share a common corporate history up until 2015. One or the other should have picked a more distinct name when they split into two. That observation notwithstanding, a "News for Nerds" web site should pay more attention to get this detail correct.

Re:

[BlueLightning]

There's bound to be confusion given that the Autonomy acquisition happened back in 2011 which was before the HP/HPE split.

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[Anonymous Coward]

Heh, HP... Well, I suppose they can buy a couple of their own toner cartridges now.

HPE not HP

[BigIrv]

they are different companies

Everyone knew it was a dumb deal

[MooseTick]

It seemed pretty obvious at the time that the Autonomy acquisition wasn't a good deal for HP. I don't see how HP could ever value an an enterprise software company at $4B when they could have recreated all their tech for much much less and add/remove whatever features they desited.

I'd bet money that if you dig deeper, key people at HP got their pockets padded nicely for approving and pushing the deal to go through.

Re:Everyone knew it was a dumb deal

[Junta]

I'll second this assessment. I remember at the time they first announced a hoard of people trying to do analysis and everyone scratching their heads as to why HPE thought to spend this much to acquire what was by all appearances a totally nothing company. Then the chorus of "I told you so" when they finally admitted they lost a bunch of money and got nothing out of it.

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[Anonymous Coward]

One of the key factors to Autonomy's success was obfuscating what in their was providing any real value. Their 'tech' was all BS and barely working document processors and data extractors that promised to do way more than what was possible. Kind of like AI startups now. They would sign huge 10m contracts and say yes to every request and spend a significant amount of time taking execs out for hookers and blow. Then they would string together a pipeline of glued together crap for IR that could barely stay

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[KiloByte]

they would string together a pipeline of glued together crap for IR that could barely stay up

Sounds like above-average quality for enterprise business software.

Re:Everyone knew it was a dumb deal

[thegarbz]

Any idiot can create software. You buy a company for its existing contracts and customer base. The deal was still boneheadded for hp, but the point is that there's far more reasons to buy a company than just not wanting to create the tech yourself.

Where's the news?

[hawk]

"HP Wastes Shareholder Money Again"

That headline has run so many times with so many mergers that it hasn't been newsworthy in decades!

Due Diligence

[AlanObject]

When a deal was on the table to buy the company I was part of, the purchasers hired a competent team that was extremely thorough in going through everything about the company. They looked at tech, talked to customers, reviewed our processes and audited our servers. I think they only place they weren't allowed was in the personnel files.

That was a tiny deal compared to a $4B M&A. I can't see how a fraud could stand up to that kind of scrutiny.

I can only conclude that HP did not do due diligence, or what they did was totally incompetent, or the report was ignored. One of those things must be true.

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[laughingskeptic]

I have had that experience, the opposite experience and the one that really took the cake was I pointed out during one acquisition that the seemingly reason we were buying a company came down to 50 lines of PL/SQL -- the decision was made to move forward despite this insight because the executives at this startup wanted to be seen as being the kind of executives that made "big decisions". So we spent $8M for 50 lines of PL/SQL -- it was the beginning of the end because right after that, the first dotcom bo

Misread subject

[PPH]

I thought someone finally strung up some scammer.

Léo Apotheker, fired by SAP and then by HP

[Anonymous Coward]

Apotheker "...was co-chief executive officer of SAP from April 2008 until he resigned in February 2010 following a decision by SAP not to renew his contract."
"During his tenure as chief executive at HP, the company lost more than $30 billion in market capitalization after a series of strategic missteps by the company..."
https://en.wikipedia.org/wiki/... [wikipedia.org]
"Léo Apotheker, HP’s CEO during the period of the merger, is quoted in the document as saying that he would have sought an explanation fro