Mike Lynch faces showdown with former HP boss Meg Whitman in $5bn Autonomy fraud trial 

Former HP chief executive Meg Whitman
Former HP chief executive Meg Whitman Credit: Bloomberg

Autonomy founder Dr Mike Lynch will today come face to face with his arch rival in the High Court when former HP chief executive Meg Whitman gives evidence in the biggest civil fraud trial in English legal history.

Ms Whitman frequently clashed with the British technology executive during their time working together at HP following the $11bn (£8.7bn) acquisition of Dr Lynch’s software business Autonomy in 2011.

The two executives fell out over plans to merge the two businesses, as well as Ms Whitman’s love of country music star Kenny Rogers.

Court filings claim Whitman “repeatedly adopted the management approach of ... playing country music to the meeting, instructing the senior executives attending to take the meaning of the country music songs and apply them to their own management methods”.

“I don’t even like country music,” Dr Lynch has said.

Ms Whitman, a Republican who once ran for governor of California, is expected to tell the court this week in the ongoing trial that she only played country music once during her time at HP.

The executive oversaw a public writedown of Autonomy’s value only a year after it bought the business, firing Dr Lynch and accusing Autonomy of inflating its financial performance.

HP is seeking around $5bn in damages from Dr Lynch over the sale and subsequent writedown of Autonomy’s value. Dr Lynch denies the allegations.

Dr Lynch’s lawyers have claimed in legal filings that Ms Whitman failed to control “infighting” within HP which they say led to the underperformance of Autonomy following its acquisition.

Ms Whitman allegedly referred to Autonomy as HP’s “unwanted stepchild” in meetings with senior executives inside the company, Dr Lynch claimed in legal filings.

The British founder claimed to have “continually sought the intervention of Ms Whitman to address the chaos then reigning internally at HP and the botching of the integration.”

Dr Lynch said that he gave a presentation to Ms Whitman in May 2012 in which he accused HP of mismanaging Autonomy. He was fired from the business days later.

Ms Whitman is expected to place the blame for Autonomy’s struggles on Dr Lynch and his management skills and will claim that Dr Lynch struggled to fit in at HP. HP’s lawyers have described Dr Lynch as “a controlling and demanding individual.”

One email sent by Dr Lynch to his senior management team at Autonomy shown to the High Court read: “If there is any problem I WANT TO KNOW ABOUT IT IN A F****** MILLISECOND from all of you.”

In November 2012, Ms Whitman announced HP had written down the value of Autonomy by $8.8bn, wiping out almost the entire value of the business.

HP said at the time that it had discovered “accounting improprieties, misrepresentation and disclosure failures” at Autonomy following an internal investigation and a review of Autonomy’s accounts.

Around the time of the writedown, HP began a secretive internal effort named “Project Sutton” designed to protect Ms Whitman’s reputation.

Documents shown to the High Court in March showed that Ms Whitman and other HP employees lobbied politicians including then Prime Minister David Cameron and George Osborne, then Chancellor of the Exchequer.

The project was designed to “protect and reinforce her credibility from a very negative impact,” the presentation read.

HP used its internal “truth squad” to check media coverage of the writedown in order to limit the damage to Ms Whitman’s reputation, the documents showed.

Ms Whitman is scheduled to appear in court on June 5 and 6 to be cross-examined by Dr Lynch’s barrister, Robert Miles QC.

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