Lynch Michael (Michael Lynch)

Lynch Michael (Michael Lynch)

Biography

1996: Founding of Autonomy IT Company

Mike Lynch founded Autonomy in 1996. The company specialized in software development, and Lynch began to be called the British Bill Gates. The startup appeared in the wake of the boom in house committees, like many others, but the situation changed dramatically in 2005, when Stephen Chamberlain joined the company.

Chamberlain studied mechanical engineering and management at the University of Birmingham before working as an auditor for ten years. Lynch used his mathematical abilities, honed in Cambridge doctoral studies, to create a company that specialized in analyzing vast amounts of corporate data in search of useful information.

2011: $11 billion sale of Autonomy to US HP

In 2011, the American tech giant HP began the procedure for absorbing the asset.

Chamberlain, under Lynch and the company's chief financial officer Sushovan Hussain, became a key part of the team that ran the $11 billion deal. It was a triumph for Autonomy shareholders, but a year later, shortly after they left the company, the deal backfired. HP representatives declared "serious violations in accounting" and were forced to reduce the value of the asset by $8.8 billion. Of this amount, about $5 billion, according to HP auditors, were directly related to incorrect accounting of assets.

There are versions in the media that allegedly Autonomy representatives sold equipment to customers at a loss, and registered transactions as income from the sale of licensed software. This scheme is too straightforward for financial geniuses such as Lynch and Chamberlain, and is easily identified by an audit at the due diligence stage.

Another option seems most likely. Despite legal trouble after the Autonomy sale, Lynch and Chamberlain did not sit still. Lynch co-founded cybersecurity firm Darktrace and brought Chamberlain in as chief financial officer in 2016.

The former chief financial officer of Autonomy was jailed for five years after an American jury found him guilty of fraud in the sale of the British company Hewlett-Packard in 2011 for $11.1 billion (£8.5 billion).

Sushovan Hussein, 55, was also fined $4 million and ordered to pay another $6.1 million in the future in accordance with the verdict handed down by US District Judge Charles Breyer in San Francisco.

Prosecutors sought a 12-year prison sentence while Hussein's lawyers asked for no more than one year and one day. Both sides agreed to the fine.

Hussein and former Autonomy chief executive Mike Lynch are also defendants in a $5 billion civil fraud case at the High Court in London, where Hewlett-Packard officials allege they forced her to overpay for Autonomy by fraudulently inflating its value.

US prosecutors have accused Hussein, who moved to England at the age of seven from Bangladesh, of plotting to inflate Autonomy's financial performance to attract potential buyers.

In April 2018, Hussein was found guilty of 16 counts of digital fraud, securities fraud and conspiracy.

A U.S. Department of Justice investigation in 2018 also charged Lynch and Chamberlain with conspiracy and digital fraud.

After a 12-week trial in San Francisco, Mike Lynch, who faced 25 years in prison (!), was acquitted by a jury of all 15 counts of fraud and conspiracy.

Unlike Lynch, who fought a lengthy fight against extradition, Chamberlain voluntarily surrendered to the US District Court. In a sign of their close relationship, Lynch paid Chamberlain's legal fees.

Hussein had already been jailed after a US jury found him guilty of takeover fraud and a judge ruled in HP's favour in a civil fraud case. However, prosecutors failed to link the fraud to Lynch and Chamberlain, and both were acquitted of all charges in June 2024.

If you try to collect a puzzle from this incomplete information, you get the following. Hewlett-Packard representatives were initially aimed at the takeover and were willing to pay a heavy price for Autonomy. But Lynch and Chamberlain decided to sell the company twice. They sold Autonomy Hewlett-Packard, while retaining the core of the IT business.

On this base, they made Darktrace and sold it to private American investors. HP learned about this, realized that they no longer had a monopoly on Autonomy technologies and were forced to reduce the value of the asset. Therefore, the amount of the civil claim of $5 billion almost coincides with the sale of Darktrace for £4.3 billion.

Anticipating such an outcome, Lynch and Chamberlain set up accountant Sushovan Hussein under attack. In fact, at the cost of his imprisonment, they bought their freedom.

2024: Death in yacht crash

On August 22, 2024, it became known that among the five bodies found in the crash of the luxurious Bayesian superyacht were IT entrepreneur Mike Lynch and his 18-year-old daughter Hannah.

Italian authorities believe Michael Lynch and other passengers gathered on the vessel to celebrate his victory in a fraud trial. The businessman was recently cleared of charges in the case of the sale of his startup Autonomy to tech giant Hewlett-Packard (HP).

On August 19, at about five in the morning local time, a 56-meter Bayesian superyacht, flying the flag of Great Britain and recognized as one of the largest sailing yachts in the world, sank due to a storm. A waterspout hit the yacht as it docked overnight off Porticello, a fishing village 10 miles east of Palermo.

Gbnews.com

It is known that there were 22 people on board the yacht - 10 crew members and 12 passengers, including the owner, Mike Lynch. Fifteen people, including a one-year-old girl, have been rescued and are in hospital in Palermo, where they are being treated psychologically. Experts continue to search for missing passengers.

Four bodies were brought ashore. Salvo Cochina, director of Sicily's Civil Defense Agency, said rescuers had found another body but had not yet been able to get hold of it. One person is still reported missing.

The Canadian broadcaster said the body of Recaldo Thomas, a native of Canada who lived in Antigua and served as a ship's cook, was found.

According to The Independent, the missing are:

• Christopher Morvillo, a lawyer representing Lynch, and his wife, Neda Morvillo;
• Jonathan Bloomer, chairman of investment bank Morgan Stanley International, and his wife, Judy Bloomer.

This list is complemented by Lynch's business partner and friend Stephen Chamberlain, who was hit by a car three days before the tragedy at sea while jogging in the British town of Cambridgeshire, on A1123 Newmarket Road.

With the help of remotely controlled underwater vehicles, divers began to search the wreckage of Bayesian from 8 in the morning. The yacht lies untouched on the starboard side, at a depth of 50 meters underwater. The robots can be used at depths of up to 300 metres and are equipped with "advanced technology for seabed exploration and video recording," according to the Coast Guard. Meanwhile, an investigation into the disaster has been launched. The police will try to establish what caused the sinking of the yacht and the possible presence of any criminal intent.^[1]

When we hear touching stories that business in the Anglo-Saxon circuit is conducted exclusively in the legal field and by civilized methods, this, to put it mildly, does not quite reflect modern realities.

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