#UK Lynch blasts US indictment of ex-Autonomy CFO


autonomy, hp, indictment, cambridge

Former Autonomy Cambridge management have delivered a blistering verdict on a decision by US authorities to indict the company’s former CFO for alleged fraud leading up to the UK technology pioneer’s $11 billion sale to HP in 2011.

A federal grand jury indicted UK citizen Sushovan Hussain with conspiracy to commit wire fraud and multiple counts of wire fraud. He has not been arrested and no court date has been fixed – and Hussain’s lawyer as well as former Autonomy CEO Mike Lynch insist the charges will be thrown out.

The Serious Fraud Office in the UK long ago jettisoned HP’s complaint saying there was not enough evidence to stand any prospect of a safe prosecution. Now Dr Lynch and Hussain’s lawyer John Keker are predicting a similar outcome in any US action. Dr Lynch pointed out that the scale of the allegations was shrinking fast.

He said: “This journey started as an allegation of a $5.5 billion fraud, now we are talking about $7.7 million and I am confident that Sushovan will show it to be zero. I know Sushovan is innocent of all these charges, and the evidence will prove this to be the case.

“HP made a series of false accusations against Autonomy in 2012. HP has since backtracked on those allegations, and changed its position time and again in the search for a scapegoat for its own failings.“

John Keker added: “Sushovan Hussain is innocent of wrongdoing. He defrauded no-one and as Autonomy’s CFO acted at all times with the highest standards of honesty, integrity and competence. He will be acquitted at trial.

“It is a shame that the US department of Justice is lending its support to HP’s attempts to blame others for its own catastrophic failings. Mr Hussain is a UK citizen who properly applied UK accounting rules for a UK company. This issue does not belong in criminal court in the United States.

A source close to the initial negotiations that took the Cambridge software business into American hands claimed to Business Weekly that former management had nothing to hide in terms of their part in the due diligence process. The source also claimed that the indictment against Hussain came on the very last day the authorities could act or drop the charges under the Statute of Limitations.

The Statute of Limitations is the length of time a person has to make a claim following an incident that gives rise to the claim. Once the specified time has passed an action can no longer be brought.

The source added that HP paid professionals millions of dollars to check out Autonomy’s figures, which were ratified and double checked by Deloitte and that Deloitte contacted all the companies named in the Autonomy invoices that underpinned the valuation of the HP acquisition and were assured that all were genuine transactions and strictly in order, the source added. “You can argue slight time delays in invoicing – measured in hours – in the case of some of the invoices but you must also take into consideration the issue of IRFS accounting versus US Gaap. And ultimately, this is all about revenue recognition. The indisputable fact is that the money in the bank was genuine and the value of the invoices involved cannot be questioned,” the sorce said.

According to the indictment, Hussain allegedly engaged in a scheme to defraud purchasers and sellers of securities of Autonomy Corporation plc (Autonomy) and Hewlett-Packard Company about the true performance of Autonomy’s business, its financial condition and its prospects for growth.

The indictment states that between 2009 and 2011, Hussain artificially inflated Autonomy’s revenues by backdating written agreements to record revenue in prior periods; recorded revenue on contracts that were subject to side letters or other contingencies that impacted revenue recognition; improperly recorded revenue for reciprocal or roundtrip transactions; and made false and misleading statements to Autonomy’s independent auditor about transactions allegedly supporting the recognition of revenue and other items in Autonomy’s financial statements. In so doing, Hussain allegedly issued materially false and misleading quarterly and annual financial statements on behalf of Autonomy. The indictment further alleges that defendant and others provided these financial statements to HP during the time that HP was considering whether to purchase Autonomy.

The indictment alleges that Hussain caused Autonomy to make materially false and misleading statements directly to HP regarding Autonomy’s financial condition, performance and business during the negotiations between HP and Autonomy leading up to the Aug. 18, 2011, acquisition announcement.

Allegedly, Hussain made false and misleading statements about the nature of Autonomy’s products, concealed Autonomy’s non-appliance hardware sales and made other false and misleading statements during HP’s “due diligence” of Autonomy.  In sum, the indictment charges Hussain with one count of conspiracy to commit wire fraud and 14 counts of wire fraud.

An indictment alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. The prosecution is the result of a multi-year investigation involving the FBI and the U.S. Securities and Exchange Commission.

A private legal battle between HP and Dr Lynch was scheduled for the High Court early next year but an informed source told Business Weekly lawyers for the parties were still talking and any court hearing – if at all – would not now be until 2018 at the earliest.

HPE executive Vice President, General Counsel John Schultz said: “HPE is pleased with the news that a federal Grand Jury has returned an indictment in this matter, alleging that Sushovan Hussain and others acted with fraudulent intent.“

from Business Weekly http://ift.tt/2eWC8Zy

This entry was posted in #UK by Startup365. Bookmark the permalink.

About Startup365

Chaque jour nous vous présenterons une nouvelle Startup française ! Notre pays regorge de talents et d'entrepreneurs brillants ! Alors partons à la découverte des meilleures startup françaises ! Certaines d'entre elles sont dans une étape essentielle dans la vie d'une startup : la recherche de financement, notamment par le financement participatif (ou crowdfunding en anglais). Alors participez à cette grande aventure en leur faisant une petite donation ! Les startups françaises ont besoin de vous !