Accounts whistleblower blackmailed Autonomy for a payoff, Mike Lynch tells High Court

Former Autonomy CEO Mike Lynch has accused the financial director who brought an internal accounting scandal to his attention of trying to blackmail the software company – and denied suggestions he tried to find a pretext for sacking the beancounter. In courtroom exchanges with barrister Laurence Rabinowitz QC, Lynch described …

[Anonymous Coward]

How much?????

£4 million a month in legal fees? Just who is committing the fraud here? That's my employees wages bills for 18 years. Can we get the lawyers in the dock please too?

If it looks like a fish, walks like a fish and quacks like a fish!!!!!

[BrownishMonstr]

Re: How much?????

Could be four milli-pounds xxx

[Nick Kew]

Re: How much?????

And overheads. Don't forget the overheads of a gravy-train. That judge and all the supporting staff, posh buildings, etc don't come cheap.

But yes, it's a fair general rule that when you have a problem, lawyers are a sure way to transform it into a much worse problem.

[Anonymous Coward]

Re: How much?????

>£4 million a month in legal fees? Just who is committing the fraud here? That's my employees wages bills for 18 years.

It's all a question of scale, £4m is at least the Apple daily rate and may even be it's hourly rate.

>Can we get the lawyers in the dock please too?

Who draft and administer the Law ? Good luck with that one.

[Message From A Self-Destructing Turnip]

Re: How much?????

'That's my employees wages bills for 18 years.'

Is that you Jeff?

[Anonymous Coward]

So your employee wage bill is £18k / month.

Let's divide that by two and give each side one mid-ranking lawyer on a reasonable fully loaded cost of £9k / month (incl. salary, tax, pension and benefits). Similar to what mid-ranking software developers cost.

Problem is that with just one lawyer, a case of this volume and complexity would take decades to complete.

Oh, and there's no money left for expert witnesses, for the judge, for copying, for transport, for office overheads, etc. etc. What about the techies that charge £100s per megabyte for simple OCR duties?

Your post shows abject ignorance. Just because you have a small business doesn't mean all businesses are small, especially not those that deal with the fall out of multi-billion dollar acquisitions gone wrong.

[NotBob]

How the lusers must feel

Reading this and not understanding most of what's going on, I got a feeling for how the lusers and cow-orkers must feel when they don't understand technology. I'll have to find a friendly accountant or something to break it down into manageable chunks for me.

[Anonymous Coward]

Re: How the lusers must feel

It’s pretty simple. Autonomy made software that didn’t work and conned people into buying it with rigged demos. HP knew this (everyone did) and bought the company anyway. Now HP are claiming that they didn’t know (everyone did) and Lynch is claiming that Autonomy actually worked (it didn’t, and everyone knew it).

[BebopWeBop]

Re: How the lusers must feel

A partial, but not wholly unreasonable interpretation, although 'didn't work' is a little harsh.

[theblackhand]

Re: How the lusers must feel

If we changed "didn't work" to "worked for very specific situations but was old as the next big thing" it would be true - Autonomy brought a lot of companies, many of which had known, viable products.

Alternatively, consider this the sequel to "The Emperor's New Clothes" where HP is the Emperor, Autonomy is his fantastic new clothes, they've added a few snakes (lawyers) and a long suffering judge listening to the Emperor pretend he only got nothing because of some shenanigans in purchasing the materials for the new clothes.

Spoiler: the snakes will probably bite everyone.

[Anonymous Coward]

These judges aren't going to buy this "fake news" - remember Mr. Lynch, you are not in Kansas anymore......

[NetBlackOps]

I'm not so sanguine about that. It might be equally said, "HP, you are not in the US anymore." The rules are (quite?) a bit different on that side of The Pond.

[asdf]

US vs UK

Our 1%ers are better than yours <fap motion>. Can't we wicker man the whole lot (for the UK flair)?

[Anonymous Coward]

I think maybe AC was making a joke about Mike Lynch and judge Lynch (albeit the latter was in Virginia, not Kansas, although the latter had its own share) - as Mike Lynch is trying to "lynch" a witness framing him as a blackmailer.

Some kind of last resort defense when you don't have far better arguments - and note, Autonomy didn't called in the police, they asked two private investigation firms to find evidences (which they didn't) and then mobbed and fired him. Were the accusation made up? Was Autonomy afraid a real investigation would have found a lot of other issues in Autonomy accounting practices?

[macjules]

I am hoping that a judge, even an English judge, can deduct $500,000 from $750,000 payoff and see how strange it might be to pay someone you are accusing of payroll fraud a lot more than the sum they are accused of stealing.

[ExampleOne]

Isn't this a complete side-show? So Autonomy may have had internal problems, which may or may not have been completely legal, and may or may not have mislead a criminal investigation, but...

None of this proves that they actively misled a company that didn't bother to A) complete due diligence, or B) actually read the report their auditors provided?

[Nick Kew]

No.

HP allege fraud, so they have to prove (on balance of probabilities) that fraud happened. That's what this evidence is looking to establish. I believe they'll also need to establish that they suffered loss through that fraud, which may be a higher bar given what everyone from Oracle to Reg commentards were saying at the time.

Ultimately what matters is the judge's view on it: whether (and to what extent) it's true, relevant, etc. But we won't know that for quite a while yet unless something dramatic happens.

[Lexeus]

Frankly Microsoft have a better chance of suing the old Nokia bosses..... *they said the Nokia 3210 was worth $$$ Billions*

[a pressbutton]

No one is innocent - or guilty

HP clearly paid too much for Autonomy

HP clearly did not do appropriate DD for a $12 bn aquisition

The HP environment was clearly not a good fit for autonomy

Autonomy flattered it's accounts - but at the time, a lot of people were doing that and it was not necessarily illegal at the time

I do see a lot of mud being flung, but I see no dirty deals done (yet) and do not expect a perry mason moment.

I think the judge will decide both sides are awful and he should get his life back.

[Muscleguy]

Re: No one is innocent - or guilty

I once spent a week of my life trying a case of metal theft by means of removing the valve heads of dry risers in multis (Scottish high rise public housing). We had the fully uniformed chief fire officer of the Tayside area take us through, at great length, what a dry riser is and why it is important.

Then the fully uniformed area police commander on the endangerment charge. Witnesses (sleepless residents of the other multi), some appearing from custody. Every lunchtime we got decanted into a bus and lunched in a secluded area at the local Hilton. At the end of the day we got to take our notes home on public transport. Justice just has to be seen to be fair.

It took a week because they were making an example of him also charging him with endangerment of life. We convicted him of both charges.

The tragedy is that whilst these valves look brass (worth $$$) they are phosphor bronze (not $), the stainless steel of the brassy world and hard to recycle. It was pointless, ignorant theft. It's always the little guys who get done for making mistakes.

[SIP My Drink]

I Can't Contain Myself...

Like seriously... The drama this case is providing just through The Register alone is so tantalising!

So Important Finance Person whistleblew about dodgy dealings, was cleared of any injustice, was demoted and then sacked... Then got a big payout...

Then a UK Watchdog started getting involved... That alone there is enough comedy for me...

100% of credit to El Reg... Please keep making me laugh...

"INSERT POPCORN EATING GIF HERE"

[Yorkshirefoxy]

ReslityyTV

Let’s have this televised and HP could sponsor the show. What’s a few billion between friends?

[Anonymous Coward]

Re: ReslityyTV

The actual content doesn't quite match the breathless, laugh-a-minute reporting ElReg is providing.

We're reading a 5 minute summary of at best, a single days events and at worst the summary of more than a weeks content.

I suspect they would have to add some additional content to make it suitable for reality TV - maybe printer ink drying?