British entrepreneur Mike Lynch artificially inflated revenue at his Autonomy so...
LONDON - British entrepreneur Mike Lynch artificially inflated revenue at his Autonomy software company before selling it to Hewlett Packard for $11 billion, the U.S. firm’s lawyer told a London court on Monday.
HP had bought big data firm Autonomy with the aim of making it the centerpiece of a plan to transform HP from a computer and printer maker into a software-focused enterprise services firm, a shift that rival IBM had already pulled off. Autonomy had engaged in “revenue-pumping” by encouraging customers to buy its products in exchange for buying goods from them that it did not need, restructuring deals to produce upfront license fees, and covertly selling pure hardware not even programmed with its software at a loss, he said.
A spokeswoman for Lynch said in an emailed statement: “Mike Lynch is pleased to finally have the opportunity to respond in court to HP’s accusations. There was no fraud at Autonomy.” Rabinowicz, however, said in court the issues were not a matter of complex financial niceties but rather of clear intention. “This is not a business dispute about how to apply accounting procedures,” he said. “This is a fraud case.”
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