Autonomy's former finance chief, Sushovan Hussain, to face fraud charges in the US

HPE seeks its pound of flesh over disastrous Autonomy acquisition

Sushovan Hussain, the former chief financial officer (CFO) of software company Autonomy, is to face charges of "conspiracy and wire fraud" after being indicted in a court in San Francisco, California last week.

The indictment is the latest move in the increasingly bitter battle between HPE, which inherited the Autonomy dispute when Hewlett-Packard split in two, and the former executives in charge of Autonomy.

Hussain, though, remains in the UK, but appears willing to travel to the US to defend himself, rather than face extradition. Hussain's lawyer, John Keker, declared that he was looking forward to the trial.

"Sushovan Hussain is innocent of wrongdoing. He defrauded no one and, as Autonomy's CFO, acted at all times with the highest standards of honesty, integrity and competence. He will be acquitted at trial," said Keker in a statement.

He continued: "It is a shame that the Department of Justice is lending its support to HP's attempts to blame others for its own catastrophic failings. Mr Hussain is a UK citizen who properly applied UK accounting rules for a UK company. This issue does not belong in a US criminal court.

"It's especially galling that the Justice Department is pursuing this case on behalf of HP, a company that went out of its way to employ a web of offshore shell companies to acquire Autonomy with the specific intent of avoiding payment of US taxes."

HP acquired Cambridge, England-based software company Autonomy for $10.9bn in November 2011 as part of its strategy back then of diversifying from hardware into software and services. Masterminded by former CEO Léo Apotheker, it was nodded through by the company's current CEO Meg Whitman, who had been on the board of the company, who took over as CEO as the deal was being finalised.

However, it quickly turned sour as it became clear that HP had wildly overpaid. Oracle CEO Larry Ellison claimed that he had earlier been offered the opportunity to buy the company at around half the price that HP eventually paid - but turned it down as overvalued.

HP claimed that it was the victim of accounting fraud perpetrated by Autonomy suggesting, among other things, that the company booked bundled hardware sales as software sales in a bid to make it look like the company was growing faster than it was.

Autonomy founder and CEO Mike Lynch, as well as Hussain, have both denied the claims made by HP and, post-split, HPE. They say that HP was fully appraised of the company's accounting practices during the due diligence phase of the acquisition.

In October last year, Lynch announced plans to sue HP in the UK for damages in excess of $150m for what his legal team claims were "false and negligent statements made about him and the Autonomy management team" by HP on 20 November 2012 and in HP's "subsequent public smear campaign".

That came after the UK's own Serious Fraud Office in January 2015 dropped its own investigation into the company on the ground that there was "insufficient evidence".

HPE, meanwhile, has off-loaded Autonomy to Micro Focus in a $8.8bn 'spin-merge' deal in which HPE shareholders will end up with 50.1 per cent of the enlarged Micro Focus.