Mike Lynch, the founder of Autonomy, and his former management team, have announced they will be suing HP for ‘loss and damage’ allegedly caused by the technology giant after it acquired Cambridge-based Autonomy in 2011.
The full statement, from the ex-Autonomy leadership, reads: “The former management of Autonomy announces today they will file claims against HP for loss and damage caused by false and negligent statements made against them by HP on 20 November 2012 and in HP’s subsequent smear campaign.
“Former Autonomy CEO Mike Lynch’s claims, which is likely to be in excess of £100 million, will be filed in the UK.”
However, HP has said that Lynch's action is in response to the suit it filed against him and former Autonomy CFO Sushovan Hussain in London’s Chancery Division High Court yesterday.
“HP can confirm that, on March 30, a claim form was filed against Michael Lynch and Sushovan Hussain alleging they engaged in fraudulent activities while executives at Autonomy,” an HP spokesperson said.
“The lawsuit seeks damages from them of approximately $5.1 billion (£3.4 billion). HP will not comment further until the proceedings have been served on the defendants.”
HP agreed to acquire Autonomy for $10.3 billion (£6.7 billion) as part of a strategy to focus on software, over hardware. The decision was controversial, with many shareholders believing that HP had overpaid.
Lynch left HP less than a year after it acquired his business, in April 2012. Seven months later, in November 2012, HP announced a writedown of $8.8 billion related to the acquisition, with over $5 billion due to alleged “accounting irregularities”. The same month, investors began legal action against HP over its handling of the takeover.
Lynch and his former management team have always rejected any allegations of impropriety.
The Serious Fraud Office (SFO) decided to close its investigation into HP’s allegations in January, deciding that after a two-year review of HP’s material, there was "insufficient evidence".
The SFO in a statement said at the time: "In respect of some aspects of the allegations, the SFO has concluded that, on the information available to it, there is insufficient evidence for a realistic prospect of conviction.
"In respect of other aspects and on the application of well-established principles, jurisdiction over the investigation has been ceded to the US authorities whose investigation is ongoing."
On a website dedicated to the court case, Lynch and his team said in January, in response to the closure of the SFO investigation in the UK: “HP now faces serious questions of its own about its conduct in this case and the false statements it has made.”
HP is understood to be cooperating fully with the US investigation.