By Abhirup Roy and Jody Godoy
(Reuters) – Mike Lynch, the technology founder once hailed as Britain's answer to Steve Jobs, took the stand in San Francisco federal court on Thursday as his trial on charges he defrauded Hewlett-Packard Co out of an $11 billion takeover deal brings his company to an end.
The testimony is a pivotal moment in a 13-year legal battle that began in 2011 with HP's disastrous acquisition of Autonomy, a software company co-founded by Lynch.
The deal was a big loss for the Silicon Valley company. HP wrote Autonomy's value down by $8.8 billion in 2012 after discovering serious accounting fraud.
Lynch and former Autonomy financial executive Stephen Chamberlain are charged with fraud and conspiracy for allegedly conspiring to inflate the company's earnings beginning in 2009 in order to attract a buyer.
Prosecutors allege that the two inflated Autonomy's finances through backdated contracts and “round trip” transactions that advanced cash to customers through sham contracts.
At the trial, which began in mid-March, jurors heard testimony from more than 30 government witnesses, including former HP CEO Leo Apotheker, who was fired weeks after the Autonomy deal was announced. Ta.
Lynch's legal team argued in court that HP was so eager to bag Autonomy and lock out potential competitors that it rushed its due diligence before the sale.
Lynch's lawyers said in opening arguments that the Cambridge-educated entrepreneur had focused on technology issues, leaving financial matters to Sushoban Hussain, Autonomy's chief financial officer at the time. .
Mr. Hussain was separately convicted in 2018 at the same court. He was released from a US prison in January after completing a five-year sentence.
The Autonomy acquisition was one of Britain's biggest high-tech deals at the time and was supposed to boost HP's software business. But it led to a series of bitter and expensive legal battles. HP nearly won a civil suit against Lynch and Hussain in London in 2022, but damages have not yet been determined. The company is seeking $4 billion.
At that trial, Lynch was on the stand for 20 days.
Lynch said HP doesn't know what it's doing with Autonomy and has yet to understand his technology.
(Reporting by Jody Godoy in New York and Abirup Roy in San Francisco; Editing by Matthew Lewis)
