Software giant ends pursuit of Mike Lynch ally in £3bn fraud case
The Telegraph has learned that HPE has agreed to settle its case against Sushovan Hussain, the former finance chief of Autonomy.
HPE has pursued Mr Hussain and the late Lynch in court for years after claiming they committed fraud by exaggerating the success of their UK tech company, Autonomy, before HPE bought it for $11bn in 2011. HPE is seeking £3bn in damages.
Details of the settlement have not been made public but it is understood there was no admission of liability.
The deal comes as the High Court prepares to award damages in the multibillion-dollar fraud case nearly a year after Lynch was killed when his super-yacht sank off the coast of Sicily.
HPE won a civil lawsuit against Lynch and Mr Hussain in 2022, but it has taken the court more than three years to confirm the level of damages it should be awarded.
Since that time, Lynch's name was cleared in a stunning legal victory in the US. He had faced decades in jail over a fraud he was alleged to have masterminded when running Autonomy, a Cambridge software business he founded. However, a US jury found him not guilty of the charges in June last year.
Just two months after being acquitted, however, Lynch was killed, along with six others including his daughter Hannah, when his super-yacht, the Bayesian, sank in a violent storm off the coast of Sicily.
This week, an interim report from British maritime authorities found that 'vulnerabilities' in the yacht's design, including its 236ft-tall mast, had contributed to the disaster.
Lynch's friends, including the banker Jonathan Bloomer and his wife Judy, Lynch's lawyer Chris Morvillo and his wife Neda, as well as the yacht's chef Recaldo Thomas, all died when the Bayesian sank. Lynch's wife, Angela Bacares, was among the survivors.
His death prompted an outpouring of grief from the British business community. Just weeks before the tragedy, Lynch had said he believed he had been given a 'second life' thanks to his acquittal.
Lynch had been instrumental in setting up Darktrace, the multibillion-pound cyber security company, and had planned to return to his work after years of legal woes. He had also intended to challenge the UK's extradition treaty with the US.
Despite Lynch's death, the civil legal case has dragged on, with HPE pursuing the claims against his estate, which is thought to be worth hundreds of millions of pounds. The case was expected to resume after the court approved an administrator over his holdings.
The High Court had previously said it expected HPE to receive 'substantially less' than what it had claimed. While the damages have yet to be awarded, Lynch's team is expected to appeal.
HPE bought Autonomy, a former FTSE-100 software business, in 2011 – but the takeover quickly unravelled after investors baulked at the deal. The US company later sacked Lynch and accused him and his senior team of fraudulently boosting the value of the business with inflated sales and 'round-trip' transactions.
While Lynch was cleared after standing trial in the US, Mr Hussain, his former finance chief, was jailed for five years by US prosecutors in 2019 for his alleged role in the scheme.
US prosecutors claimed he had used 'sophisticated accounting methods to falsely inflate Autonomy's revenues'. Mr Hussain denied wrongdoing and unsuccessfully appealed against the decision.
An HPE spokesman said: 'We're pleased to have reached a resolution in this matter with Mr Hussain, and await Mr Justice Hildyard's ruling on overall damages in the case.' Lynch's family declined to comment. Mr Hussain declined to comment.
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