Mike Lynch is fighting extradition on charges linked to the sale of his company Autonomy to HP.
The long-running saga between HP and Autonomy enters its next chapter this week as British businessman Mike Lynch fights extradition to the US.
Lynch co-founded UK tech firm Autonomy, which was acquired by HP in 2011. He is facing more than a dozen fraud and conspiracy charges around the acquisition deal, with allegations of financial impropriety.
US prosecutors now want Lynch extradited to the US to stand trial, but Lynch and his legal team are expected to argue in court this week that the UK is a more suitable venue for the case.
Lynch co-founded Autonomy, which rose to be one of the UK’s crown jewels in tech. In 2011, HP acquired the company for a hefty $11bn but HP claimed soon after the deal was inked that all was not as it seemed.
A year after the deal, HP wrote down the value of the UK company by $8.8bn, with $5bn of that write down due to what it called “accounting improprieties, disclosure failures and outright misrepresentations”. HP argues that Autonomy had misrepresented its finances, but Lynch denies the allegations.
HP and US prosecutors have targeted Lynch and his former colleague Sushovan Hussain, who was Autonomy’s chief financial officer. Hussain was convicted in the US in 2019 of several fraud charges related to the Autonomy sale. He was sentenced to 60 months in jail and slapped with a $4m fine.
But UK-based businessman and investor Lynch – who has remained active in UK tech since 2011, notably backing cybersecurity giant Darktrace – has fought against travelling to the US to face charges, which he denies. Currently out on a £10m bail, Lynch wants the case to be heard in a British court.
He is also still waiting for the verdict on a separate $5bn civil claim brought by HP in the UK.
The outcome of the extradition trial could fray tensions between the UK and the US. Five former cabinet ministers publicly stated last month that the UK courts had “surrendered sovereignty” to the US in extradition hearings by willingly giving up defendants too easily.
“The Government cannot stand by as another Briton risks being delivered like this to the US justice system,” the former ministers said in a letter to The Times.
The judge in the case, which begins on Tuesday (9 February) in Westminster Magistrates’ Court, will only be examining whether Lynch’s case merits extradition, not his guilt or innocence.
UK judges have relatively new powers, granted in 2013, to stop an extradition if the allegations at hand mostly occurred in the UK. In this scenario, Autonomy was a UK company but owned by a US parent, which muddies the water. However, the UK’s Serious Fraud Office dropped its investigation into Autonomy in 2015, and ceded jurisdiction over aspects of the case to US authorities.
UK judges have extradited high-profile executives and individuals before. In 2018, their powers to stop extraditions got the most significant airing when a judge blocked the extradition of hacker Lauri Love. More recently, a UK judge blocked the extradition of Wikileaks founder Julian Assange.