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Mike Lynch quits posts after US files criminal charges

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Dr Mike Lynch has resigned from the advisory board of the Royal Society and from his membership of the government’s Council for Science and Technology (CST) after the US Department of Justice filed criminal charges against him last week. The charges relate to the $11billion sale of Cambridge-based Autonomy to Hewlett Packard (HP) in 2011.

"Dr Mike Lynch has resigned from Royal Society committees, he has not resigned his Fellowship," said a Royal Society spokesperson. It is understood that Dr Lynch also resigned as a board director of Darktrace on Friday afternoon. Darktrace was approached for comment.

A Government Office for Science spokesperson said: “Dr. Lynch has decided to resign his membership of the CST with immediate effect. We appreciate the valuable contribution he has made to the CST in recent years.”

The honeymoon period post-sale lasted just a year. In 2012 the deal turned sour and HP wrote off $8.8bn in relation to the acquisition, accusing Lynch and colleagues of financial mismanagement. The US justice department's charges relate to Lynch - Autonomy's chief executive - and former Autonomy finance executive Stephen Chamberlain, accusing them of having artificially inflated the company's performance between 2009 and 2011 immediately prior to the sale to HP. The charges include 14 counts of conspiracy and fraud and carry a maximum penalty of 20 years in jail.

The Department of Justice is seeking to confiscate $815m from Dr Lynch, which it says was obtained through the alleged fraud.

The defence was inevitably robust.

"These stale allegations are meritless and we reject them emphatically," said Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson in a statement. "There was no conspiracy at Autonomy and no fraud against HP for the Department of Justice to take up. HP has a long history of failed acquisitions. Autonomy was merely the latest successful company it destroyed. HP has sought to blame Autonomy for its own crippling errors, and has falsely accused Mike Lynch to cover its own tracks.

"Mike Lynch will not be a scapegoat for their failures. He has done nothing wrong and will vigorously defend the charges against him."

A Serious Fraud Office investigation in the UK closed in 2015 without charge, followed by suit and countersuit. Last year, HP sold the whole software division that included Autonomy to Micro Focus. HP's loss was estimated at $8.8bn. Even then, the gremlins were never quiescent: Micro Focus, until recently Britain’s largest listed technology company, lost more than half its market value in March after warning sales could shrink more than expected.

It was unclear at the time of posting whether Dr Lynch will attend court in the US or fight the case from the UK.

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