More Microsoft SCO links emerge

A BayStar founder claims he met with three Microsoft senior executives before investing in SCO, and the software maker isn't denying the charge
Written by Graeme Wearden, Contributor

Microsoft appears to be more deeply involved in SCO's legal battles against Linux than previously reported.

As reported on Monday, court documents from the ongoing court case between IBM and SCO had claimed Microsoft had encouraged financial firm BayStar to invest in SCO. The claim was made by BayStar founder Larry Goldfarb, who said Microsoft's vice president of corporate development and strategy, Richard Emerson, had offered to underwrite BayStar's own investment in SCO.

Legal Web site Groklaw, which has followed SCO's legal actions extensively, published further details of Goldfarb's declaration to the court on Tuesday. In it, Goldfarb named two other Microsoft executives with whom he claimed to have discussed SCO.

"I had discussions with Kenneth Lustig, Microsoft's managing director of intellectual property and Tivanka Ellawala, from Microsoft's corporate development department regarding the SCO deal," said Goldfarb in his court declaration.

IBM has cited this declaration, which can be seen on Groklaw, in a memorandum to support its motion for summary judgement on SCO's claims that IBM included proprietary Unix code in Linux.

In the declaration, made under oath, Goldfarb said he was approached by Emerson in 2003.

"Mr. Emerson stated that Microsoft wished to promote SCO and its pending lawsuit about IBM and the Linux operating system. But Microsoft did not want to be seen as attacking IBM or Linux. For that reason, Microsoft wanted to further its interest through independent investors such as BayStar," Goldfarb claimed.

Goldfarb added: "Microsoft assured me that it would in some way guarantee BayStar's investment in SCO. However, Microsoft would not agree to put anything in writing on this point."

BayStar invested a total of $50m in SCO, but later sold its stake back to SCO in 2004 after relations between the two parties collapsed. According to Goldfarb, BayStar decided to withdraw because SCO failed to provide evidence to back up its case against IBM.

Goldfarb's declaration appears to substantiate claims that Microsoft was a key mover behind SCO's litigation. In a statement issued on Monday night, Microsoft indicated that Goldfarb's declaration was accurate.

"Microsoft has no financial relationship with BayStar and never agreed to guarantee any of BayStar's $50m investment in SCO. The BayStar declaration confirms that no guarantee was ever provided."

BayStar admitted in March 2004 that it had been introduced to SCO by Microsoft, after a leaked email appeared to reveal that Microsoft was responsible for $86m of funding received by SCO.

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