​HP sues Autonomy founder Lynch and former CFO for $5.1bn

HP is pursuing Autonomy co-founder Mike Lynch and his team for $5.1bn in damages.

Hewlett Packard has filed a lawsuit against Autonomy's founder and former chief financial officer, seeking $5.1bn in damages.

The suit is the latest twist in HP's long-running battle with Mike Lynch, the founder of Autonomy, since it bought the company for £7bn ($11bn) in August 2011.

HP said on Wednesday that it is suing Lynch and Autonomy's former CFO Sushovan Hussain for $5.1bn, claiming Autonomy's former management inflated their financials.

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"HP can confirm that, on March 30, a Claim Form was filed against Michael Lynch and Sushovan Hussain alleging they engaged in fraudulent activities while executives at Autonomy. The lawsuit seeks damages from them of approximately $5.1bn," HP said in a statement to ZDNet.

The Autonomy acquisition was meant to spearhead HP's move into software and analytics. However, by November 2011, HP was claiming Autonomy's management had inflated its books in order to "mislead investors and potential buyers".

HP wrote down the value of its software unit by $8.8bn in its 2012 fourth-quarter earnings, and attributed some $5.4bn of that to the "serious accounting improprieties" it said it had found at Autonomy.

In response to HP's new claim, Autonomy's former management team intends to counter-sue HP.

"The former management of Autonomy announces today they will file claims against HP for loss and damage caused by false and negligent statements made against them by HP on 20 November 2012 and in HP's subsequent smear campaign. Former Autonomy CEO Mike Lynch's claim, which is likely to be in excess of £100 million, will be filed in the UK," the group said in a statement.

Lynch has consistently denied HP's accusations of improprieties, saying HP mishandled Autonomy after the acquisition.

In January, the UK's Serious Fraud Office dropped its investigation into the Autonomy deal after finding insufficient evidence for a realistic prospect of conviction.

An investigation by the US Securities and Exchanges Commission into the HP-Autonomy sale is ongoing.

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