After a ruling in favor of "HP" Will London hand over "British Bill Gates" to the United States?
Mike Lynch, one of the UK's most prominent tech entrepreneurs and the person often referred to as the "British Bill Gates", is now on the verge of being extradited to the US to face criminal charges related to the sale of his company Autonomy to Hewlett-Packard HP for short.
Lynch, 56, sold software startup Autonomy to HP in 2011 for $11.7 billion, instantly making him one of the UK's richest and most famous tech founders.
HP's bid was 64% higher than Autonomy's market value. This led to the collapse of the share price of the information technology giant on Wall Street by 20% on the day the deal was announced, while the share price of Autonomy rose by more than 70%.
One year later, HP announced that "accounting irregularities" had forced it to pay a lot of money for Autonomy, which specialized in selling data analytics software to companies.
The main accusation against HP is that Autonomy executives inflated the company's revenue by about $700 million, and HP sued for $5 billion. Lynch also filed a counter-lawsuit, which led to an extremely complex legal battle that lasted a decade.
However, there are signs that things are coming to an end.
Last Friday, Home Secretary Priti Patel approved Lynch's extradition to the United States, after a judge earlier ruled in HP's favor in a civil case against Lynch over allegations he conspired to inflate the value of Autonomy before HP bought it.
Judge Robert Hildyard said HP won most of its claims, but that the damages would be well below the $5 billion the company is seeking.
Lynch wouldn't be the first Autonomy to be charged in the United States. In May 2019, former CFO Suchovan Hussain was charged with fraud and imprisoned for 5 years.
An HP spokesperson told CNBC Monday that the company was pleased with the verdict, "Lynch and Hussein defrauded the market and intentionally misled Hewlett-Pickard. The judge held them responsible."
Lynch's lawyers did not immediately respond to a request for comment by the news channel, but they plan to appeal the rulings, and the process could take 12 months, according to legal experts. But if his appeal is unsuccessful, he could face up to 20 years in prison.
Opposition to Lynch's extradition
Some don't believe in the UK tech industry, including Brent Huberman, co-founder of Last Minute. com (Lastminute.com) that Lynch should deliver.
"Is it right for a British businessman operating under UK laws to be extradited to the US? I don't think so, and I don't think other businessmen would agree to that either," Huberman told the Sunday Times.
Describing the founder of Autonomy as "a pre-eminent figure in UK tech" Huberman asked Lynch to speak at the Founders Forum last summer, according to the paper's report.
HP sold the remainder of Autonomy, after writing off three-quarters of the company's value, to Britain's Micro Focus in September 2016 as part of an $8.8 billion deal that included other HP business units.
"It's sad what happened," Lynch said at a 2016 technology conference. "In UK laws there is no way to stop a takeover. So when HP came in and wanted to make their bid we couldn't stop it."
"The problem was the week after the deal where HP's leaders were fired and we were left with workers in a group whose domain was hardware, not software. All those who had an understanding of intelligent software growth weren't there," he added.
In addition to Lynch, the United States and the United Kingdom are trying to extradite the latter, the founder of WikiLeaks, Julian Assange, who is wanted by the American authorities for the release of hundreds of thousands of classified military documents and diplomatic cables in 2010 and 2011. They say his actions endangered lives and they charge him with 18 counts, meaning he faces 175 years in prison.
Earlier this month, Assange was granted the right to take his extradition case to the UK's Supreme Court.
Humble beginnings
Born on the outskirts of London in Essex on 16 June 1965, Lynch had rather humble beginnings. His mother was a nurse and his father was a firefighter.
He went to the prestigious Cambridge University, where he studied the natural sciences, focusing on fields including electronics, mathematics and biology. After completing his undergraduate degree, he obtained a Ph.D. in Signal Processing and Communication.
In the late 1980s, he founded Lynett Systems Ltd, which produced sound designs and products for the music industry.
A few years later, in the early 1990s, he founded a fingerprint recognition company called Cambridge Neurodynamics, which counts South Yorkshire Police among its clients.
But his breakthrough came with Autonomy, which he co-founded in 1996 as a division of Cambridge Neurodynamics.