Litigation Formally Filed Against Michael Lynch and Sushovan Hussain in UK Proceedings
PALO ALTO, Calif., May 5, 2015 — HP confirmed today that Particulars of Claim against Lynch and Hussain were served on April 17, 2015 by certain HP subsidiaries. A copy of the Particulars of Claim is now publicly available from the High Court in London. In summary, the Particulars of Claim assert that:
During the relevant period, Lynch and Hussain caused Autonomy group companies to engage in improper transactions and accounting practices that artificially inflated and accelerated Autonomy’s reported revenues, understated its costs of goods sold (thereby artificially inflating its gross margins), misrepresented its rate of organic growth and the nature and quality of its revenues, and overstated its gross and net profits.
This conduct by Lynch and Hussain was systematic and was sustained for more than two years prior to the acquisition of Autonomy by HP. Its purpose was to ensure that the Autonomy group’s financial performance, as reported in Autonomy’s published information, appeared to be that of a rapidly growing pure software company whose performance was consistently in line with market expectations. The reality was that the group was experiencing little or no growth, it was losing market share, and its true financial performance consistently fell far short of market expectations.
In causing Autonomy group companies to engage in these improper transactions and accounting practices, Lynch and Hussain breached fiduciary duties that they owed as directors of Autonomy.
The claims seek damages in excess of $5 billion against Mike Lynch and Sushovan Hussain.
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