Lynch steps up war of words with Hewlett-Packard claiming 'HP file proves there was no fraud'

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The war of words between Hewlett-Packard and its former stablemate Dr Mike Lynch intensified last night after the British entrepreneur accused the US computer maker of lying to the stock market.

Lynch, whose software firm Autonomy was bought by HP in 2011, said allegations of a £3billion fraud by former directors, including himself, were unsupported by evidence.

He has handed a spreadsheet that he says disproves HP’s claims to the Securities and Exchanges Commission, Wall Street’s regulator. The SEC, along with the FBI and the UK’s Serious Fraud Office, is already investigating Autonomy and HP.

Battling it out: The war of words between Hewlett-Packard and its former stablemate Dr Mike Lynch intensified last night after the British entrepreneur accused the US computer maker of lying to the stock market

An HP spokesman said: ‘The same fertile imagination that was behind a massive fraud is apparently still hard at work making up stories. We would encourage Dr Lynch to spend as much time as possible with the authorities.’

In the document, drawn up by HP in the year following the deal, the computer group assessed which Autonomy software sales complied with international accounting standards, and which needed to be investigated further.

It identifies around £220million of deals that HP queried. These deals were spread over the two years running up to the acquisition.

Some of them were where hardware deals had been reclassified as software sales, which have higher margins, it is alleged.

Lynch said the document showed ‘that the writedown was driven by accounting policy changes and difference, not fraud’.

He added: ‘[HP boss] Meg Whitman must now withdraw her allegations against the former management team of Autonomy.’

The battle between Lynch and Whitman has been fierce since HP accused him of a massive accounting cover-up. HP claims Lynch and other directors inflated the worth of the company in the run-up to the acquisition. 

System crash: Lynch, whose software firm Autonomy was bought by HP in 2011, said allegations of a £3billion fraud by former directors, including himself, were unsupported by evidence