Autonomy Corp PLC updates
Sign up to myFT Daily Digest to be the first to know about Autonomy Corp PLC news.
Mike Lynch, the billionaire founder of the software company Autonomy, can be extradited to the US, a London judge ruled on Thursday in a case which is being seen as a test of British courts’ willingness to block the removal of business executives to the US.
Lynch, one of the UK’s best-known technology entrepreneurs, has been charged in the US with 17 counts of conspiracy and fraud relating to Hewlett-Packard’s purchase of Autonomy for $11bn in 2011.
Lynch is accused of allegedly manipulating Autonomy’s accounts, leading HP to pay an extra $5bn for the company. He denies wrongdoing.
His extradition case was heard earlier this year but hearings were adjourned to await the outcome of a ruling on a High Court civil fraud lawsuit brought against Lynch by Hewlett Packard Enterprise over the Autonomy sale.
But after hearing that the High Court ruling was not due to be handed down for several months, District Judge Michael Snow told Lynch on Thursday that he rejected his case and did not believe extradition was an abuse of process.
Mike Lynch said he was “disappointed” that Snow had ruled against him without waiting for the outcome of the High Court case.
He said in a statement: “At the request of the US 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 UK. We say this case belongs in the UK.”
Lynch has pledged to appeal if home secretary Priti Patel decided to order his removal. Losing parties in extradition cases can undertake a lengthy appeals process to the High Court and Supreme Court.
Lynch’s argument against extradition to the US was founded on a defence known as “forum bar”, which allows the courts to block extradition if a large part of the alleged criminal activity took place in the UK.
His barrister Alex Bailin QC had argued to Westminster magistrates court earlier this year that the UK’s Serious Fraud Office had reserved its right to prosecute Lynch in the UK if his extradition is blocked. The SFO dropped its own probe in 2015 after ceding parts of its investigation to the US.
However, the US government has argued that Lynch should be prosecuted in the US because “America was the location of intended victims of the fraud” and HP’s shareholders were predominantly US-based.
The case has wider significance for British business executives, setting an important precedent for those accused of criminal wrongdoing. Bailin told the extradition hearing earlier this year that business executives should be “held accountable here” because the “US is not the global marshal of the corporate world”.
The UK-US extradition treaty signed with the US in 2003 has long been criticised by MPs for being weighted in favour of the US and being used to target alleged white-collar suspects as well as terrorists.
David Davis, Tory MP, said after the ruling the Lynch decision was an “outrage” and that because of the “unfair and unbalanced” extradition treaty, Snow had ignored “every word of a 10-month civil trial” that considered the case in “exhaustive detail”.
The forum bar argument had been initially seen as “toothless” when it was first introduced in 2014 but in recent years it has been relied on by judges in certain cases when alleged conduct took place in the UK.
In 2018 the UK courts refused to extradite Stuart Scott, a HSBC banker who was based in London and was charged in the US with forex-rigging.
In his ruling, Snow said the effects of Lynch’s alleged conduct were felt in the US even though Lynch was mainly based in the UK. “I am satisfied that the huge financial losses caused to HP in the USA, the losses suffered by American investors and the significant reputational damage caused to HP strongly favours extradition,” he ruled.
Snow concluded adding that any attempt to prosecute Lynch in the UK by the SFO would result in “considerable additional delay” to any trial. He also criticised one of Lynch’s expert witnesses who testified to the hearings about US prison conditions as being an “unreliable partisan witness”.
Snow did not have to decide Lynch’s guilt or innocence of the charges but merely to decide on whether the case meets the legal criteria for extradition.
