Former Autonomy CFO charged with fraud

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The US authorities has charged Autonomy’s former finance chief with a multimillion-greenback fraud earlier than the UK software program firm’s disastrous $11bn sale to Hewlett-Packard in 2011.

Federal prosecutors are looking for no less than $7.7m in proceeds from Sushovan Hussain, an extended-serving Autonomy government, who they allege exaggerated its monetary efficiency and misled buyers, together with HP throughout its due diligence course of.

Mr Hussain, who denies any wrongdoing, was indicted on expenses of wire fraud and conspiracy in a US district courtroom in San Francisco on Thursday.

In 2012, HP introduced an $eight.8bn writedown of the worth of Autonomy, which specialised in analysing giant portions of knowledge, only a yr after the deal closed. Since then it has offloaded the unit to Micro Focus, because the authorized fallout from the deal continues on each side of the Atlantic.

Within the UK, HP has sued Mr Hussain and Mike Lynch, Autonomy’s founder, for $5.1bn, alleging “accounting misrepresentations”. Each executives have persistently denied any such unlawful actions.

Mr Lynch has countersued HP for $160m over reputational injury, claiming that its executives tried to “shift the blame” for the disastrous deal to them. The instances are because of be heard earlier than the Excessive Courtroom in London in 2018.

Mr Hussain was Autonomy’s chief monetary officer from June 2001 till November 2011, in addition to serving as a board director for a lot of that point. In line with courtroom filings, he personally made no less than $7.7m when HP acquired Autonomy.

The US case towards Mr Hussain alleges that he and unnamed different events “engaged in a fraudulent scheme to deceive purchasers and sellers of Autonomy securities and HP concerning the true efficiency of Autonomy’s enterprise, its monetary situation and its prospects for progress”.

The alleged scheme, which prosecutors say concerned backdating contracts and deceptive auditors about income recognition, ensured that Autonomy all the time met or exceeded its quarterly forecasts, bringing bonuses and “artificially” buoying the corporate’s share worth, making it a extra engaging takeover goal.

John Keker, Mr Hussain’s lawyer, stated his shopper was “harmless of wrongdoing”.

“He defrauded nobody and, as Autonomy’s CFO, acted always with the very best requirements of honesty, integrity and competence,” Mr Keker stated in a press release. “He can be acquitted at trial.”

Mr Keker, who has represented banker Frank Quattrone and director George Lucas, accused HP of making an attempt in charge others for “its personal catastrophic failings”.

The UK’s Critical Fraud Workplace investigated the deal however discovered inadequate proof to prosecute.

In September, HP Enterprise agreed to promote its software program division, together with a lot of what was beforehand Autonomy, to Micro Focus, one other UK-based mostly software program group, as a part of a $eight.8bn deal.


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