Hewlett-Packard filed a lawsuit against former Autonomy CEO Michael Lynch and former CFO Sushovan Hussain in London on Monday. Hewlett-Packard alleged that the executives engaged in fraudulent activities during their tenure at Autonomy.
Hewlett-Packard is seeking $5.1 billion in damages
A spokesperson for Hewlett-Packard confirmed that the company filed charges against Lynch and Hussain. She declined to provide further details regarding the company’s lawsuit against the former Autonomy executives “until the proceedings have been served on the defendants.” HP is seeking$5.1 billion in damages from Lynch and Hussain in the lawsuit.
Hewlett-Packard acquired Autonomy for more than $11 billion during the tenure of its former CEO Leo Apotheker in October 2011. In November last year, HP wrote down 8.8 billion accounting charge related to the Autonomy acquisition. At the time, the PC maker explained that it “discovered serious accounting improprieties” and “outright misrepresentations” related to the transaction. The company said it overpaid Autonomy by approximately $5 billion.
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Lynch repeatedly and strongly denied the allegations of Hewlett-Packard that they practiced accounting irregularities in the transaction. In March last year, Lynch emphasized that HP selectively leaked documents and information to the international media, and frequently used materials taken out of context to create false impressions and smear their reputations.
According to him, Hewlett-Packard was misleading shareholders, and evidence shows that Autonomy was open and transparent in the deal. Shareholders filed a lawsuit against in connection with the Autonomy fraud scandal, and eventually settled the case last year.
Regulators in the United Kingdom and United States investigated Hewlett-Packard ’s allegations against Autonomy. The U.S, Serious Fraud Office recently closed its investigation after two years citing the reason that it didn’t find enough evidence for a “realistic prospect of conviction.” The U.S. Department of Justice (DOJ) investigation on the issue is still ongoing.
Former Autonomy executives to file counter charges against Hewlett-Packard
Lynch and Hussain issued a statement indicating that they will file counter charges against Hewlett-Packard in UK. Lynch plans to seek more than £100 million or $148 million in damages.
“The former management of Autonomy announces today they will file claims against Hewlett-Packard 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,” according to their statement.