The British technology tycoon Mike Lynch told a US courtroom that “life is messy” as he denied charges that he masterminded a “massive” multi-billion dollar fraud.
Taking the witness stand in San Francisco, two months into his US fraud trial, Mr Lynch admitted that his software company Autonomy was not “perfect” but insisted that it was an “extremely successful company”.
Mr Lynch, once dubbed Britain’s Bill Gates, is fighting claims that he oversaw fraudulent accounting at Autonomy that wildly inflated the former FTSE 100 company’s value before it was sold to Hewlett Packard for $11bn (£8.7bn) in 2011.
“Of course it wasn’t perfect,” Mr Lynch, 58, said when asked by his lawyer Christopher Morvillo if he would describe Autonomy as perfect.
“The reality of life is that it’s nuanced and it’s messy and sometimes you do your best to get through it, and companies are just like that.
“If you take a microscope to a spotless kitchen you’ll find bacteria.”
However, he insisted: “I think Autonomy was an extremely successful company. From a financial point of view, it was highly profitable.”
Mr Lynch, who founded Autonomy in 1996, could face up to 25 years in prison if found guilty. His testimony is expected to run into next week.
Mr Lynch’s legal team had pushed for the court to declare a mistrial earlier on Thursday, claiming US prosecutors had brought up evidence the previous day that should have been excluded from the trial and was intended to prejudice Mr Lynch. The motion was denied by the court. A mistrial could have seen Mr Lynch tried at a later date.
During the trial, US lawyers have interviewed a series of customers, observers and former employees, seeking to tie Mr Lynch to an alleged pattern of accounting misconduct, such as sham deals in which customers were paid by Autonomy to buy software from the company.
Mr Lynch told the court on Thursday that the evidence he had heard had come from people he had never met and concerned agreements he was never aware of.
“I’ve had lots of reactions to what I’ve heard but I guess it’s summed up by one word: It’s surreal,” he said.
Mr Lynch’s lawyers have said that he had been largely focused on developing Autonomy’s technology and that he was not involved in accounting. On Thursday he said he could write code “but not sell toffee”.
On Wednesday, Jonathan Bloomer, the former chief executive of Prudential who served on Autonomy’s board, alleged that Mr Lynch had largely ignored Autonomy’s accounting.
“Mike was mostly interested in the strategy, new products, new areas to look at, potential acquisitions. For example, he didn’t come the audit committee and wasn’t particularly interested in the finance side,” Mr Bloomer claimed.
Meanwhile, prosecutors have portrayed him as a “controlling, dominating, intimidating boss” and the “driving force” behind the “massive” fraud.
Autonomy executives including Mr Lynch left HP shortly after the Silicon Valley giant bought the British company. A year after the deal, HP wrote down the majority of the takeover’s value and said there were accounting improprieties at Autonomy.
Mr Lynch has said HP’s then-chief executive Meg Whitman, who was brought in after the Autonomy deal and pursued a different strategy to her predecessor Leo Apotheker, mismanaged the takeover.
Mr Lynch and Stephen Chamberlain, Autonomy’s former finance director, were charged in 2018 and both deny fraud. Sushovan Hussain, the company’s former chief financial officer, was sentenced to five years in prison over the sale in 2019.
Mr Lynch and Mr Hussain have been found liable in a civil trial in the UK over the deal. HP has asked for $4bn in damages although a judge has said the final amount will be significantly less.
After leaving Autonomy, Mr Lynch was a founding investor in Darktrace, the London-listed cybersecurity company. He no longer has a formal role at the company and has significantly sold down his stake in recent months.
The prosecution and the defence are due to provide their final pieces of evidence next week before closing arguments and a decision by a jury.