Fraud Charges On Mike Lynch; Extradited to the US

Lynch, who was once known as “Britain’s Bill Gates”, will face 17 fraud charges over Hewlett Packard’s (HP) $11 billion acquisition of Autonomy, the company which he grew into Britain’s one of the leading companies, but it was bought by HP in the year 2011.

Britain’s interior ministry confirmed on Friday that Lynch was extradited on May 11.

Moreover, when he appeared in court on Thursday, he was ordered by a judge to pay a bond of $100 million, hand over his passport, and be placed under a 24-hour guard to secure his release.

Lynch, who is 57 and has ironically always denied any wrongdoing, might face 20 years in jail.

He, who was once highly praised by academics, politicians, and scientists for establishing a huge software company with the help of his research at Cambridge University, has spent the last decade fighting legal actions related to the HP takeover.

Within a year, HP confirmed the value of Autonomy as $8.8 billion and later brought a civil lawsuit against Lynch in London along with Autonomy’s former chief financial officer, Sushovan Hussain.

In the legal action, a British judge said in January 2022 that Lynch had managed to plan a huge fraud in order to inflate the value of Autonomy. This meant that the Silicon Valley company significantly succeeded in its case.

Lynch had said earlier that HP did not know what was to be done with Autonomy. H also claimed that it was “out of their hands” to understand his mind and technology.

At the same time, the United States had brought extreme criminal charges against this man which concerned wire fraud and securities fraud.

Even though Lynch fought extradition business, on April 21, Britain’s High Court refused him permission to appeal. His lawyers further argued that he should be summoned in Britain.

When his appeal was rejected by Britain’s High Court, Lynch had said that the United States’ legal approach to the UK is a grave threat to the rights of all British citizens and even the sovereignty of the UK.

Following this, his spokesperson refused to comment until Friday.

Lynch finally pleaded not guilty to 17 counts in court in the United States on Thursday, according to court documents. Moreover, a status conference would be held on May 19 to fix a date for the trial.

According to the United States court, his wealth stands at $450 million.

Hussain, Lynch’s former colleague was also sent down to prison for five years on committing fraud in 2019 in the United States.

Interestingly, this case has also raised eyes on Darktrace (DARK.L), which is an FTSE 250 British cyber security company. Lynch was not only behind its modelling, but he and his wife, Angela Bacares, own around 10 percent of the 2-billion-pound company.

Though, Darktrace said in February that Lynch is not a part of this firm, and he is not even on the list of boarding members.

CEO of Darktrace, Poppy Gustaffson, had said earlier, “He’s a shareholder, he owns 4% of the business but he’s not involved operation in the business.”

But Darktrace’s financial statements have a lot to say. A New York-based investment business expressed that its sales, margins, and growth rates might be overstated.

Moreover, Quintessential Capital Management put forward a short report which peeked into the firm’s activity and said that it has “failed to provide a satisfactory explanation for most of the issues we raised.”

In its defense, Darktrace rejected all the allegations and even commissioned an acclaimed accountancy firm, Ernst & Young (EY) to proceed with an investigation.

Now, Lynch and his lawyers are preparing for his trial in San Francisco. Moreover, while being there, he would be confined to a property, and would only be allowed to leave only for legal meetings, court appearances, and medical appointments.

Proofread & Published By Naveenika Chauhan