Month: September 2024

This article may contain opinion and conspiracy theory and conjecture.  

There is no intent to damage the reputation of anyone living or dead.

Hewlett Packard Enterprise Co. said it intends to pursue the $4 billion damages claim in London against the estate of the recently deceased British tech tycoon Mike Lynch.

Just over a week after the bodies of Lynch and his 18-year-old daughter, Hannah, were recovered from the wreck of his sunken yacht, the US company said it planned to collect any damages that are awarded by a London court. HPE won the British civil case over the collapse of Lynch’s Autonomy Corp. and is waiting for a judge to decide how much it is owed.

When Hewlett Packard bought knowledge management software firm Autonomy, it didn’t realize it was buying into a now alleged multibillion accounting switch and bait. Shareholders sued HP, and HP sued Autonomy CEO Mike Lynch.

And although former Autonomy CEO Mike Lynch was ultimately found not guilty of fraud in the US, it is easier to suggest civil fraud than criminal fraud.

No sooner had the acquisition closed than revenue began to flag, prompting an internal investigation in which HP uncovered signs of past creative accounting at Autonomy. Rather than selling software to customers, HP said, Autonomy had been selling them hardware at a loss, then booking the sales as software licensing revenue. But was the loss just on paper? Was the long term plan to up sale software to the buyers of the hardware? That is not an uncommon strategy in the tech world. Does the failure of the up sale to happen constitute fraud?

Regardless, the discovery forced HP to write down the value of Autonomy by more than $5 billion because the money was not there for whatever reason, triggering a wave of shareholder lawsuits. HP in turn sued Lynch in a UK court, and the U.S. Department of Justice launched a criminal investigation.

The court found in favor of HP in the UK, where lawyers are still arguing about damages, but the US court eventually found Lynch not guilty of the DOJ’s wire fraud charges.

And just two months later, while partying with family and friends to celebrate his court victory, Lynch died in a tragic boating accident. Or was it an accident?

The drowning death of British tech tycoon Mike Lynch in stormy seas off the coast of Sicily was even made stranger by the fact that two days earlier, his business partner Stephen Chamberlain was fatally injured in a car accident.

As long-standing business associates, the pair were tried as co-defendants in a fraud trial over the sale of software company Autonomy to Hewlett-Packard for $11 billion (£7 billion). Following the sale of Autonomy in 2011, Lynch co-founded the cybersecurity firm Darktrace and Chamberlain was appointed chief financial officer.

The Cambridge-based company fights cyberattacks using software that learns the behavioral patterns of every actor within an organization and detects unusual activity.

There is nothing so far to indicate foul play in either man’s respective accidents, which have been put down to a tragic coincidence.

Adding to the mystery, however, were the business partners’ high stepping in the worlds of U.K. and U.S. intelligence.

Lynch co-founded Darktrace in partnership with former U.K. intelligence officials in 2013.

One of the co-founders was Stephen Huxter, a high-ranking figure in MI5’s cyber defense team, who became a managing director at Darktrace.

Lynch’s $1 billion VC fund Invoke Capital — set up following the sale of Autonomy — backed the Cambridge University spin-out with an initial investment of £12 million.

Which besides the mystery of the deaths begs the question, are the US and British intelligence agencies now in the business of industrial espionage and robbing American companies.

 

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