Yahoo Finance HP's plan to 'destroy Autonomy' revealed by Mike Lynch's lawyers in UK's biggest fraud trial
Mike Lynch's lawyers will this week argue that Hewlett Packard's claims against the British entrepreneur are "far-fetched", instead claiming HP set out to sabotage his business, as one of the UK's biggest ever fraud trials gets underway.
The civil trial, which began at London's High Court today, will see Mr Lynch go head-to-head with HP, the technology giant which bought his business Autonomy for $11bn (£8.4bn) in 2011.
HP is seeking around $5bn in damages from Mr Lynch, arguing that he committed accounting fraud by inflating the value of Autonomy prior to its acquisition.
A year after the deal completed HP wrote off almost the entire value of the company, at the time accusing the business of “accounting improprieties, misrepresentations and disclosure failures”.
The case is expected to last more than nine months, and is the largest fraud trial in English legal history.
Lynch has denied the allegations and said the failure of the $11 billion acquisition was down to HP's mismanagement.
In opening arguments, released on Monday, lawyers for Mr Lynch claimed that the allegation that he had acted fraudulently in failing to disclose some of the company's sales "bears no serious scrutiny".
They argue HP had failed to take no steps to raise allegations with Mr Lynch, or other members of Autonomy's senior management, before starting its "aggressive and co-ordinated press campaign".
"Instead, HP chose to shoot first and ask questions later," they said.
Mr Lynch denies the claims made against him, and is counter-suing HP for more than $150m for reputational damage.
“The claimants’ choice of target appears to be motivated by the fact that Mr Lynch is wealthy and has a deep pocket for the purposes of this claim," his lawyers said on Monday.
"The claimants need a high-profile target to blame for the losses that they suffered," they added.
Instead, they argue, HP failed to follow "any incoherent integration strategy", including failing to expand its workforce, preventing the company having direct content with long-term customers, and abandoning the consolidation of its technology with another part of the business.
"[HP] mishandled the pricing of Autonomy's products, on some occasions putting heavy discounts on Autonomy's products to promote HP's low margin hardware sales and, on other occasions, marking them up significantly to boost other divisions' revenue," Lynch's lawyers claim.
The case continues.
