“This case has wider implications for British business”
Former Autonomy CEO Dr Mike Lynch has submitted himself for arrest this morning, in what his legal team described as a formality required as part of an extradition process initiated by the US Department of Justice. Lynch is still contesting extradition.
US federal prosecutors filed criminal charges against the UK tech executive and investor in November 2018, over the $11 billion sale of his software company Autonomy to HP in 2011. The charges include 14 counts of conspiracy and fraud.
They are seeking to confiscate $815 million.
The acquisition was disastrous for HP, costing then-CEO Léo Apotheke his job and spawning multiple lawsuits. After writing off three quarters of Autonomy’s value, it sold the what was left of the company to Micro Focus in 2016.
(Micro Focus, in turn, is still grappling with the integration of those assets, this week admitting that it “significantly underestimated the challenges that emerged in the integration of the HPE Software business”: these are set to cost it $960 million).
Dr Lynch is also embroiled in a multi-billion civil lawsuit with HPE.
His lawyers Chris Morvillo and Reid Weingarten said: “Since HP first raised [their] allegations more than seven years ago, Dr Lynch has steadfastly denied them and has worked hard to properly respond and set the record straight.
“The UK SFO previously investigated and did not pursue the allegations. Dr Lynch has now answered HP’s claims in the appropriate forum, the High Court in London, where he attended court every day of the 10-month trial.
It is unfortunate that this arrest has been brought. It should not progress until the judgment is handed down in his civil case. If Dr Lynch wins the civil case, his extradition should not progress at all. https://t.co/18WWTcwAim
— David Davis (@DavidDavisMP) February 5, 2020
“During that trial, Dr Lynch testified about all of these allegations for more than 20 days. He has not hidden, nor has he shied away from defending his conduct. Having patiently and diligently defended the case in England for several years, he awaits the civil trial judgment. The US DOJ should not have commenced extradition proceedings prior to the judgment of the English High Court.
They added: “This case has wider implications for British business. The US claims concern alleged conduct in the UK. Dr Lynch is a British citizen who ran a British company listed on the London Stock Exchange, governed by English law and UK accounting standards. This extradition request reflects yet another example of the DOJ’s attempts to exert extraterritorial jurisdiction over non-US conduct.
“The forum bar in the UK Extradition Act was enacted by the UK Parliament to protect British citizens from such a scenario.
“Dr Lynch vigorously rejects all the allegations against him and is determined to continue to fight these charges.”
More to follow.