Ex-Autonomy CFO jailed and fined $4m
The former CFO of Autonomy, Sushovan Hussain, has been given a prison sentence and $4m (£3m) fine by a US court over claims of fraud relating to the £8.5bn sale of the UK software company to Hewlett-Packard (HP) in 2011
14 May 2019
Hussain was found guilty last year on 16 wire fraud, securities fraud and conspiracy counts. A court in San Francisco has now ordered him to pay the fine, plus $6.1m in forfeiture and sentenced him to five years in jail.
Hussain has indicated he intends to appeal against the conviction.
A former Autonomy finance director, Stephen Chamberlain, is also facing charges in the US. In addition, there is an ongoing case in the High Court in London in which HP is suing both Hussain and Autonomy founder Mike Lynch over claims they ‘committed a deliberate fraud over a sustained period of time’ to artificially inflate the firm's value in the run-up to the sale.
Both Hussain and Lynch have denied the claims. Lynch is counter-suing HP for making ‘a series of false, misleading and unfair public statements’.
The dispute centres around allegations of accounting irregularities connected to revenue recognition figures used in Autonomy’s $11bn acquisition by HP. The US tech giant wrote down $8.8bn the following year, of which $5bn related to alleged accounting irregularities and alleged misrepresentation of how software rental and acquisitions were shown.
Commenting on Hussain’s conviction a spokesman for Hewlett-Packard Enterprise, one of the two entities that HP split into in 2015, said: ‘As we have consistently maintained, Mr Hussain engaged in outright fraud and deliberately misled the market about non-existent sales through a series of calculated sham transactions. Autonomy manipulated their revenue, and quarterly results, making an accurate valuation impossible.
‘That Mr Hussain attempted to depict the fraud as nothing more than a misunderstanding of international accounting rules was, and still remains, patently ridiculous – and he has now been held accountable for his role in defrauding HP.’