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January 22, 2016updated 31 Aug 2016 9:44am

Trial date set for Hewlett-Packard multi-billion fraud case

News: HP, Mike Lynch and Sushovan Hussain to have their day in court over $10 billion takeover dispute.

By Ellie Burns

Hewlett-Packard and Autonomy are to continue their long running $10 billion takeover dispute for a further two years, with a 2018 London trial set to see the two companies fight over $5.1 billion.

Yesterday, January 21, Michael Lynch and Sushovan Hussain, both former Autonomy executives, appeared alongside Hewlett-Packard lawyers to argue their case following lawsuits filed last year.

Hewlett Packard is suing former co-founder Lynch and CFO Hussain for $5.1bn over the alleged misrepresentation of Autonomy finances prior to Hewlett-Packard’s buyout of the company. In October 2015, Lynch filed a $160m countersuit accusing Hewlett-Packard of ruining his reputation.

Hewlett Packard is arguing that they overpaid on the Autonomy deal, with the company seeking $4.58 billion for the amount they overpaid. The company is also claiming a further $420 million over shares bought from Lynch and Hussain at the time of the takeover. Lynch was paid £517 million, and Hussain £10 million, for their Autonomy shares. A further $60 million is also sought by Hewlett-Packard in regards to other Autonomy subsidiaries.

The long-running dispute between Autonomy and Hewlett-Packard stretches back to 2012, when HP accused Autonomy of cooking the books and wrote off $8.8bn of goodwill and intangible assets relating to the acquired Autonomy business.

The company accused Autonomy management of accounting ‘improprieties and misrepresentations" to the tune of $5 billion, and referred its evidence to the US Securities and Exchange Commission’s Enforcement Division and the UK’s Serious Fraud Office for civil and criminal investigation. In 2013, the UK Financial Reporting Council (FRC) also launched an investigation, following accusations of fraud and probed Autonomy accounts between 1 January 2009 and 30 June 2011.

The saga has also seen HP shareholders suing, and then dropping, a lawsuit alleging that the company board made ‘fake claims’ regarding the acquisition, while Hussain came out in 2014 claiming that the Autonomy fraud claims were part of a HP cover-up. Mike Lynch then muddied the waters even further when he counter-sued, accusing HP of creating a ‘smear campaign‘ which saw his reputation tarnished with claims that he had mismanaged the software company.

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With the latest lawsuit there are no signs of this saga coming to a conclusion any time soon, with both sides clearly committed in fighting to the bitter end.

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