Autonomy's former chief financial officer, Sushovan Hussain could be facing up to 20 years in prison and a fine of $250,000 after being found guilty in a US court on 16 charges of fraud. Hussain will hear his bail terms on Friday, and has pledged to appeal the conviction.
The charges relate to claims that Autonomy falsified its accounts in the run-up to its $11.7 billion acquisition by Hewlett-Packard (HP) in October 2011.
It follows a case lasting 18 months after Hussain was indicted in a San Francisco, California court in November 2016.
The court found that Hussain had helped to artificially inflate the company's financial position before it was sold, in a scheme starting in 2009. HPE had claimed that various deals, such as the bundling of hardware with software sales, had given an impression of a company whose software was growing faster than it actually was.
Hussain engaged in outright fraud and deliberately misled the market about non-existent sales through a series of calculated sham transactions
Hussain and Lynch had accused HP of not doing sufficient due diligence and of suffering from ‘buyer's remorse' for wildly over-paying for the acquisition.
HPE was understandably delighted with the conviction. In a statement, it 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 the jury has now held him accountable for his role in defrauding HP."
Contrary to reports*, Hussain attended for the duration of the trial. His lawyer, John Keker, said that Hussain would appeal the decision, using the exclusion of key evidence as one of the grounds for the appeal.
In a statement, Keker asserted that Hussain had "defrauded no one" and added that he had "acted at all times with the highest standards of honesty, integrity and competence.
"It is a shame that the United States Department of Justice lent its support to HP's campaign to blame others for its own catastrophic failings.
"Defence evidence of Hewlett-Packard's conduct in the year following the acquisition, which would have shown the jury that HP was not in fact misled at all, was excluded from evidence and will be one basis for the appeal."
The Hewlett-Packard (HP) acquisition of Autonomy for much more than it was worth was one of a series of disastrous deals pursued by HP - now HPE, following the November 2015 demerger of the PC and printer business - as it attempted to shift from hardware into software and services.
The CEO behind the deal, Leo Apotheker, was removed while the deal was still going through, but it was still approved by incoming CEO Meg Whitman, who went on to instigate both civil and criminal legal action against Hussain and Mike Lynch, the founder of Autonomy.
Within months, Lynch had been forced out amid claims that the deal had turned sour and, in November 2012 wrote-down $8.8 billion of the cost of the acquisition.
Oracle CEO Larry Ellison also claimed that Autonomy had earlier been shopped to his software company, which he had rejected as over-valued when the company's market valuation was $6 billion.
HP's complaints against Hussain and Lynch over Autonomy's accounting were examined by the Serious Fraud Office in the UK, but in January 2015 it announced that it was ending its investigation into the affair.
A consolidated civil case against Lynch and Hussain - in which HP had persuaded the shareholders suing it to pool their efforts and sue Lynch and Hussain instead, enjoying a share of the payout from that - was thrown out in the US.
HPE is also pursuing a civil case against both men in the courts in London.
* An earlier version of this story suggested that Hussain had stayed in the UK for his trial. We apologise for the inaccuracy.
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