Home Secretary approves extradition of Cambridge entrepreneur Mike Lynch to US

Cambridge entrepreneur Mike Lynch – whose software technology and investment skills have helped boost the city’s startling 21st century success story – has come out fighting following Priti Patel’s decision to sign an extradition order on Friday (January 28).

The development is the latest round in a long-running story of a mismatch that will be pored over by business historians for years to come.

Dr Lynch founded Autonomy in 1996 out of a company called Cambridge Neurodynamics, an early venture in using machine learning to develop software techniques which he had explored in his PhD thesis at Cambridge University. Autonomy was acquired by Hewlett-Packard (HP) in 2011 for $11.7bn. A clash of cultures rapidly proved disastrous. Within a year, HP had written off $8.8bn of Autonomy’s value. HP subsequently claimed this resulted from “serious accounting improprieties” and “outright misrepresentations” by the previous management.

The legal process began in 2015 when HP launched a $5bn claim in the high court against Dr Lynch and his former finance director Sushovan Hussain. In 2018 Autonomy’s ex-CFO Sushovan Hussain was found guilty of wire fraud, and other crimes related to Autonomy’s sale and was sentenced to five years in prison. He subsequently allowed out on bail after his appeal raised a “substantial question over his conviction”. Mr Hussain’s appeal failed in 2020. Autonomy had been sold to a British software company, Micro Focus, in 2017.

While Dr Lynch argued that HP’s problems were due to mismanagement of its asset, HP took to the British courts to launch an action against him in 2019. The court case lasted 93 days, with Dr Lynch cross-examined for 22 days, one of the longest-ever cross-examinations in British legal history. Laurence Rabinowitz QC, representing HP, said Autonomy used “a variety of fraudulent devices” to either accelerate revenue or to invent revenue that never existed in the first place, and had “artificially inflated Autonomy’s reported revenues, revenue growth and gross margins”.

Last week, the High Court in London ruled that HP had “substantially won” its civil case against Mr Lynch and Mr Hussain. The judge added that HP is likely to receive “substantially less” than the amount claimed in damages. Dr Lynch has denied all charges against him and has signalled he intends to appeal against the High Court judge’s decision.

This week, Dr Lynch lost the legal battle, launched last July, to be extradited. On Wednesday, Ms Patel was given until midnight on Friday to decide on his extradition after the High Court judge ruling against Dr Lynch’s legal challenge over a previously set deadline.

Ms Patel had wanted to consider Mr Justice Hildyard’s ruling on the High Court civil claim before making an extradition decision.

A Home Office spokesperson said: “Under the Extradition Act 2003, the Secretary of State must sign an extradition order if there are no grounds to prohibit the order being made. Extradition requests are only sent to the Home Secretary once a judge decides it can proceed after considering various aspects of the case.

“On January 28, following consideration by the courts, the extradition of Dr Michael Lynch to the US was ordered.”

Chris Morvillo, of law firm Clifford Chance – representing Dr Lynch – said in a statement after the Home Office announcement: “Dr Lynch firmly denies the charges brought against him in the US and will continue to fight to establish his innocence.

“He is a British citizen who ran a British company in Britain subject to British laws and rules and that is where the matter should be resolved.

“This is not the end of the battle – far from it.

“Dr Lynch will now file an appeal to the High Court in London.”

Earlier, Kelwin Nicholls, another lawyer at Clifford Chance representing the entrepreneur, said after the High Court judge’s decision: “Today’s outcome is disappointing and Dr Lynch intends to appeal.

“We will study the full judgment over the coming weeks. We note the judge’s concerns over the reliability of some of HP’s witnesses.

“We also note the judge’s expectation that any loss suffered by HP will be substantially less than the five billion dollars (£3.8 billion) claimed.”

Dr Lynch has launched a counter-claim for at least $125m in damages against HP for “a series of false, misleading and unfair public statements” about his alleged responsibility for supposed accounting irregularities and misrepresentations at Autonomy.

He accused HP of “making a series of far-fetched allegations of fraud and scapegoating”, arguing it had “destroyed one of the most successful and promising software companies of its time due to management incompetence, politics and infighting”.

Dr Lynch, from Suffolk, argued the technology giant was trying to make him “a scapegoat for their failures”.

In the criminal proceedings in the US, Dr Lynch faces charges of securities fraud, wire fraud and conspiracy in a federal court over the sale of Autonomy.