Tech Tycoon Lynch Loses U.K. Extradition Fight Over HP Deal
(Bloomberg) -- British tech tycoon Mike Lynch should be extradited to the U.S. to face fraud charges stemming from the $11 billion sale of his software firm Autonomy to Hewlett-Packard, a London judge ruled.
The U.S. Department of Justice has pursued Lynch over allegations that he dressed Autonomy up for a sale to HP by inflating revenue. The Silicon Valley hardware giant acquired the software company in 2011 only to write down the value by $8.8 billion a year later. The ruling will now be sent to the U.K.’s Home Secretary Priti Patel for her decision on the matter.
“I have no doubt that significant financial and reputational harm was caused, both directly and indirectly, within the USA to HP and its shareholders,” District Judge Michael Snow said Thursday.
The ruling deals a huge blow to one of the U.K.’s most prominent tech businessmen, a former adviser to the prime minister and a big investor in other U.K.-listed firms such as Darktrace Plc. He’d insisted from the outset that the case should not be heard in the U.S., asserting that none of the alleged misconduct took place overseas.
It was an argument that had previously found favor in other high-profile extradition cases such as that of hacker Lauri Love and former HSBC Holdings Plc trader Stuart Scott who successfully blocked their extraditions to the U.S. to face criminal trials.
“At the request of the U.S. Department of Justice, the court has ruled that a British citizen who ran a British company listed on the London Stock Exchange should be extradited to America over allegations about his conduct in the U.K.,” Chris Morvillo, a lawyer for Lynch said in a statement. “We say this case belongs in the U.K.”
Lynch, who personally made more than $800 million from the HP deal, was “the leader of a corporate conspiracy,” the U.S. said. He was arrested in February last year and has been on bail ever since. Lynch denies the charges.
Darktrace, which is staffed by former Autonomy executives and was funded by Lynch’s investment vehicle Invoke Capital, slumped the most since it first listed in April. The stock was down 12% by 3:15 p.m. in London.
The high-profile case has attracted significant political attention with lawmakers highlighting perceived imbalances in the U.S.-U.K. extradition treaty. Lynch argues that a “very substantial measure” of the supposed wrongdoing took place in Britain.
The decision came after the judge said he wouldn’t wait any longer for a much-delayed ruling in a $5 billion London civil trial brought by Hewlett-Packard, calling it “of limited significance in the case.”
British lawmakers including David Davis, who attended the ruling via video, have said that the treaty is unequal and that the U.K. government should delay the extradition until the judgment in Lynch’s London case was known.
A Home Office press officer couldn’t immediately comment. Hewlett-Packard Enterprise Co., which brought the civil suit, declined to comment.
From the outset, Lynch’s legal team have criticized the overreach of the U.S., saying the Department of Justice is “not the global marshal of the corporate world.”
Lynch said that HP spent tens of millions of dollars attempting to prove fraud, but failed to tie him to any wrongdoing.
Snow, the extradition judge, said he “quickly regretted” his initial decision to wait for the civil judgment.
“This is not nine weeks, this is months,” he said. “We will sink into the New Year and it will be two years since the arrest that judgment will be handed down.”
Lynch was released on bail.
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