Former Autonomy executive convicted of fraud over role in $10.3bn takeover by Hewlett Packard

Sushovan Hussain was convicted of 16 counts of wire and securities fraud for artificially inflating Autonomy’s valuation before it was bought out by Hewlett Packard

Ben Chapman
Tuesday 01 May 2018 18:26
Comments
Hewlett Packard has been in a long-running dispute with the executives of Autonomy, the UK technology company it bought out in 2011
Hewlett Packard has been in a long-running dispute with the executives of Autonomy, the UK technology company it bought out in 2011

The former chief financial officer of UK software firm Autonomy has been found guilty of fraud by a US court.

Sushovan Hussain was convicted of 16 counts of wire and securities fraud for artificially inflating Autonomy’s valuation before it was bought out by Hewlett Packard in a disastrous $10.3bn (£7.1bn) deal in 2011.

Autonomy was the UK’s second-largest software business at the time but just a year after the takeover, HP wrote down its value by $8.8bn after finding accounting irregularities.

Prosecutors said Autonomy’s senior managers boosted the company's share price by artificially increasing the number of transactions on its balance sheet.

The guilty verdict goes some way to vindicating HP which has been accused by Autonomy’s British founder and chief executive Mike Lynch of making up the accusations to cover up its own bad decision making and management.

Mr Hussain faces up to 20 year in prison and a $250,000 fine for securities fraud. He and Mr Lynch also faces a $5bn civil lawsuit filed by HP next year.

The US technology giant said in a statement that it was pleased with the verdict.

“As we have consistently maintained, Mr Hussain engaged in outright fraud and deliberately misled the market about non-existent sales through a series of calculated sham transactions,” the company said.

“Autonomy manipulated their revenue, and quarterly results, making an accurate valuation impossible.

“That Mr Hussain attempted to depict the fraud as nothing more than a misunderstanding of international accounting rules was, and still remains, patently ridiculous - and the jury has now held him accountable for his role in defrauding HP.”

Mr Hussain pleaded not guilty in the trial and his lawyer, John Keker, said afterwards that he had acted “at all times with the highest standards of honesty, integrity and competence“.

Mr Keker added: “It is a shame that the United States Department of Justice lent its support to HP's campaign to blame others for its own catastrophic failings.”

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in