It is 'unjust' for High Court to use Deloitte evidence, Mike Lynch's lawyers claim
It would be “unjust” for the $5bn (£3.5bn) Autonomy High Court fraud trial to receive last-minute evidence about misconduct by Deloitte, lawyers for Mike Lynch have claimed.
In a hearing held via video call on Thursday, lawyers for the Autonomy founder attempted to block the introduction of the new evidence months before a decision is expected in the $5bn civil trial.
“It would be unjust for a party to be affected by the outcome of previous proceedings when he wasn’t party to them,” Richard Hill QC, representing Lynch, said.
Hewlett Packard Enterprise is attempting to persuade Mr Justice Hildyard to consider the outcome of an independent accounting tribunal held last year into Deloitte’s role as auditor of Autonomy.
Deloitte was fined a record £15m by the Financial Reporting Council (FRC) after the tribunal found that former partners at the firm carried out “serious and serial failures.”
“Dr Lynch obviously had no involvement in what points were taken and with what evidence,” Mr Hill said of the tribunal. The FRC had “relatively scant evidence” for its process compared to the High Court, he alleged.
Conall Patton QC, representing HPE, said that allowing the judge to consider the findings of the FRC tribunal would add “real value”.
HP, which bought Autonomy for $11bn in 2011, is seeking $5bn in damages after it says it was forced to write down almost the entire value of the business.
It alleges that Autonomy staff underreported the company’s costs and falsely inflated revenues and profits before the deal, including by booking hardware sales as if they were more lucrative software products.
Mr Lynch and co-defendant Sushovan Hussain, Autonomy’s former chief financial officer, both deny the allegations. Mr Lynch is separately fighting extradition to the US where he faces multiple fraud charges, which he has also denied.
Decisions in the High Court trial and Mr Lynch’s extradition hearing are expected in the coming months.
