Autonomy Founder Dismisses €5bn HP Fraud Case

IT entrepreneur Mike Lynch has said details of Hewlett Packard's $5bn (£3.2bn) lawsuit over its purchase of British firm Autonomy show there is no "smoking gun" to prove fraud.

The US computer maker is suing Autonomy's founder and its former finance director Sushovan Hussain, accusing the pair of "systematically" hiding the performance of the software firm ahead of the deal in 2011.

It alleges they masterminded a fraud through improper deals and accounting practices that led HP to overpay for the UK firm.

The Silicon Valley-based firm paid $11.7bn for Autonomy and claims Autonomy overstated revenue from software and related services activities by as much as 52% in the final quarter of 2010, and by an average of 35.9% in the two quarters before it agreed to be bought.

The court filing further alleged that a US employee was fired by Autonomy for raising questions about its accounts.

HP added that it believed it was acquiring a rapidly growing company that was gaining market share but a "dishonest concealment of material facts" meant Cambridge-based Autonomy's value was inflated.

In an interview with Reuters, Mr Lynch described HP's claim as "a simple rehash of previous leaks and insinuations that add up to one long disagreement over accounting treatment".

"That's not fraud," he added.

Both he and Mr Hussain, who has previously denied any wrongdoing, have accused HP in the past of casting personal smears and "breathless ranting."

There has been a war of words across the Atlantic between Mr Lynch and HP since the company first raised concerns about the deal.

The Serious Fraud Office concluded there was "insufficient evidence for a realistic prospect of conviction" in relation to HP's fraud allegations.

It handed jurisdiction to US authorities, whose investigation is ongoing.

Deloitte, which was Autonomy's auditor ahead of the sale, has said it stands by its audits.