Britain’s biggest fraud trial pits Mike Lynch against Hewlett Packard

LONDON’S LEGAL district, dotted with purveyors of horsehair wigs and pubs once frequented by Charles Dickens, seems an unlikely setting for an entrepreneur at the cutting edge of technology. Mike Lynch, sometimes called Britain’s Bill Gates, backed Darktrace, an artificial-intelligence-powered cyber-security firm that has become one of the country’s most highly valued startups. But Mr Lynch will not be celebrating. Instead he is spending summer in court fighting Hewlett-Packard (HP), an American IT giant, over alleged fraud at Autonomy, another firm he founded and which HP bought in 2011.

It is Britain’s biggest-ever fraud case. HP’s claim of $5.1bn against Mr Lynch is massive chiefly because the American firm overpaid for Autonomy. A decade ago, after a series of boardroom crises, HP was keen to add high-margin software to its lacklustre hardware business. It paid $10.3bn for Autonomy, which reported revenues of $870m in 2010, representing a whopping 64% premium to its market value.