Mike Lynch, a prominent tech entrepreneur in the United Kingdom, has been charged by authorities in the United States of America with fraud over the sale of Autonomy, a software company, to Hewlett Packard way back in 2011.
Yesterday, the US Department of Justice filed charges against Lynch in a court in San Francisco.
The charges carry a maximum penalty of 20 years of imprisonment. It also includes 14 counts of fraud and conspiracy.
Lynch was a co-founder Autonomy. The company was sold to HP in 2011 in a rather disastrous $11.7 billion (£7.4 billion) deal.
Within a year, various major problems became evident and HP wrote down $8.8 billion of the value of Autonomy.
HP claims that “serious accounting improprieties” were at the root of the loss, however, Lynch has always insisted that HP mismanaged the said acquisition.
The Serious Fraud Office of the United Kingdom examined the deal, however, in 2015, it decided not to proceed with charges.
Lynch could not be immediately contacted for comment for the matter, however, the Financial Times said that his lawyers called the indictment a “travesty of justice.”
Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson said in a statement: “The claims amount to a business dispute over the application of UK accounting standards, which is the subject of a civil case with HP in the courts of England, where it belongs.”
Lynch has stepped down from his position as an adviser to the government of the United Kingdom and as a fellow of the Royal Society after being slapped with the criminal charges.
His lawyers, Reid Weingarten of Steptoe & Johnson and Chris Morvillo of Clifford Chance, stated: “These stale allegations are meritless and we reject them emphatically.”
They continued: “HP has sought to blame Autonomy for its own crippling errors, and has falsely accused Mike Lynch to cover its own tracks.”
The lawyers noted: “Mike Lynch will not be a scapegoat for their failures. He has done nothing wrong and will vigorously defend the charges against him.”
A spokesperson for the Government Office for Science stated: “Dr Lynch has decided to resign his membership of the CST [council for science and technology] with immediate effect. We appreciate the valuable contribution he has made to the CST in recent years.”