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Ex-Autonomy CFO Sushovan Hussain ordered to wear GPS ankle tag and hand over passport

Hussain's bail conditions ban him from leaving the US, while he awaits sentencing

Sushovan Hussain, the former Autonomy chief financial officer, has been ordered to surrender his passport, wear a GPS ankle tag and to hand over $5 million as part of his bail conditions in a hearing on Friday.

It follows his conviction for fraud handed down at the beginning of last week and comes pending sentencing and an appeal that his lawyer, John Keker, has vowed to file.

Hussain was accused of perpetrating a number of accounting practices intended to make it look like Autonomy was growing faster than it really was: "He used backdated contracts, round trips, channel stuffing and other forms of accounting fraud to inflate Autonomy's publicly reported revenues," claimed prosecutors at his trial.

A number of financial analysts who had questioned some of the company's accounting practices in the years running-up to the 2011 acquisition of Autonomy by Hewlett-Packard were "excommunicated", they claim.

Three gave evidence at the trial, while the former head of Autonomy's US operation, Chris Egan, was able to make a plea bargain in return for giving evidence for the prosecution, whose legal bills, according to The Times, are being covered by HPE.

However, a number of defence witnesses who could have testified in Hussain's defence were barred because of the court's refusal to grant immunity, or to let them give evidence via video link.

Hussain was found guilty on 16 charges of fraud by a court in the US on 30 April and could face up to 20 years in prison if his appeal is unsuccessful.

That followed a case lasting 18 months after his indictment in a San Francisco, California court in November 2016.

Hussain was prosecuted following complaints by Hewlett-Packard (HP) - now HPE - that Autonomy had committed accounting fraud prior to HP's $11.7 billion acquisition of Autonomy.

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 and Lynch, meanwhile, 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 last week, 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 some 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."

Hewlett-Packard (HP) acquired Autonomy for $11.7 billion (£7.1bn) in October 2011 - 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. However, 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 had also claimed that Autonomy had 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.

In addition, 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.

Ex-Autonomy CFO Sushovan Hussain ordered to wear GPS ankle tag and hand over passport

Hussain's bail conditions ban him from leaving the US, while he awaits sentencing

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