Businessman Mike Lynch loses $5bn fraud case over sale of Cambridge firm Autonomy to Hewlett Packard

A British tech entrepreneur has lost a long-running multi-billion dollar fraud case against the American tech giant Hewlett Packard.

Mike Lynch, the founder of Cambridge software company Autonomy, was being sued for around $5bn (£3.4bn) after HP bought his firm a decade ago.

The firm's former chief financial officer, Sushovan Hussain, was also being sued.

HP claimed the two men "artificially inflated Autonomy's reported revenues, revenue growth and gross margins", claiming that Mr Lynch "committed a deliberate fraud over a sustained period of time," which it said forced it to announce an $8.8bn (£6.6bn) write-down of the firm's value.

Mr Lynch has indicated he will appeal the judgement.

Mr Justice Hildyard delivered a summary of his conclusions in the case on Friday, more than two years after the start of what was believed to be the UK's biggest civil fraud trial - which was heard over nine months in 2019.

Reading out the summary at the High Court in London, he said HP and the other claimants had "substantially won" their claim.

His full judgment in the case is expected to be published at a later date but remains embargoed until then.

Home Secretary Priti Patel will now have to decide whether to extradite Mr Lynch to the United States, where he is facing separate criminal proceedings over the sale of Autonomy.

US authorities claim that Mr Lynch, who denies all charges against him, deliberately overstated the value of his business, which specialised in software to sort through large data sets.

The two men denied the claims and Mr Lynch launched a counter-claim for at least $125m (£95m) in damages against HP for "a series of false, misleading and unfair public statements".

He accused HP of "making a series of far-fetched allegations of fraud and scapegoating", arguing it had "destroyed one of the most successful and promising software companies of its time due to management incompetence, politics and infighting".

Mr Lynch, from Suffolk, argued that the technology giant was trying to make him "a scapegoat for their failures".

Mr Justice Hildyard said the amount of damages to be paid to HP and the other claimants would be dealt with at a later date.

A spokesperson for the technology firm, now Hewlett Packard Enterprise (HPE), said: “Dr Lynch and Mr Hussain defrauded and deliberately misled the market and Hewlett Packard.

“HPE is pleased that the judge has held them accountable.”

Kelwin Nicholls, of law firm Clifford Chance, representing Dr Lynch, said in a statement after the decision: “Today’s outcome is disappointing and Dr Lynch intends to appeal.

“We will study the full judgment over the coming weeks. We note the judge’s concerns over the reliability of some of HP’s witnesses. We also note the judge’s expectation that any loss suffered by HP will be substantially less than the $5bn dollars (£3.8bn) claimed.”