Hewlett Packard’s fraud complaint against Autonomy founder Mike Lynch will probably be made public within a fortnight but the case may take years to finish.
In 2011, HP paid $11.1bn (£6.8bn) for Autonomy, a British software company, but a year later said it was worth $8.8bn less.
HP and its shareholders have accused Autonomy of misleading them over the true value of the company but Autonomy has denied this.
Last week, HP said it will sue Mr Lynch, and Sushovan Hussain, Autonomy’s former chief financial officer, in London’s High Court, the FT reported. The company is seeking damages of $5.1bn over an alleged fraud that occurred during the pair’s tenure.
In December last year, HP, which is being represented by city law firm Travers Smith, sent a private 200-page letter to legal representatives for Mr Lynch and Mr Hussain, the FT reported, citing people familiar with the matter.
The document outlines the $5.1bn claim HP intends to make against the two former Autonomy executives. It claims that the the group concocted deals to fraudulently attempt to inflate its value before the acquisition, the FT reported.
Both men have consistently denied the allegations.
Julie Killip, a litigation lawyer at Gordon Dadds, told the FT that the damages claim is one of the largest seen in a UK court. “I can’t think of many that have been as big as this,” she said. “Tactically the amount is maybe a scare tactic. It could just be finger in the air, think of a figure that could include any damages we come up with.”
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.