Sir David Davis, former leader of the Conservative Party, has strongly criticized Britain's extradition treaty with the United States following the acquittal of British technology entrepreneur Mike Lynch.
Lynch was acquitted of charges related to inflating the value of his company, Autonomy, in its sale to Hewlett-Packard (HP).
Davis stated that the acquittal is “real clear evidence of how ridiculous” the extradition treaty is, suggesting that it is having a “demoralizing effect” on British companies considering selling to American buyers. He warned, “The US Department of Justice clearly believes that any sale to an American company is subject to US rules and regulations, regardless of where it is located in the world.”
A 2003 treaty, designed to simplify the extradition process for dangerous criminals, was used to extradite Lynch, 58, over alleged fraud in the 2011 sale of Autonomy to HP. Davis, a long-term critic of the treaty, expressed concerns that British businessmen could face legal battles. biased in the United States long after their business dealings.
After a three-month trial in San Francisco, Lynch was acquitted late Thursday night. Commenting on the trial, Davis said: “I would be very careful about any deal if I were a British tech entrepreneur because I would never have known that five or ten years later I wouldn't be flown to America to face my party.” The case is in a partisan court.”
Other high-profile cases under the treaty include the extradition of David Birmingham, part of the “NatWest Three” linked to the Enron scandal, who spent 37 months in a US prison. Davis stressed that most U.S. federal cases, nearly 97%, are resolved through plea deals, which can force individuals to admit guilt.
Autonomy, founded by Lynch in 1996, specializes in analyzing unstructured data from various sources. HP acquired the company for $11 billion in 2011, with the aim of integrating its software capabilities into its product offerings. However, the deal soured, with HP accusing Lynch of financial manipulation to inflate Autonomy's value. Lynch has consistently denied these accusations over the past 13 years.
Davis described the case as “ridiculous,” explaining: “You have a sale of a British company on a British stock exchange, which was bought by a European subsidiary of Hewlett-Packard. They suddenly decided they had been scammed after they fired the CEO who had bought it. “It was ridiculous.”
After the acquittal, Lynch and Davis pledged to address what they saw as flaws in the extradition treaty. Senior business leaders, including Sir John Rose and Lord Stevenson of Codenham, had previously called for a halt to Lynch's extradition, reflecting widespread concern within the business community.
Brent Hoberman, founder of Lastmine.com, celebrated the ruling on social media, saying: “Great news for UK tech! Many UK tech founders were looking up to Mike and will be happy to see him acquitted.”
Suranga Chandratilake, partner at Balderton and former US CTO at Autonomy, added: “Mike Lynch is a fantastic technologist and entrepreneur. If this ruling means he returns to the UK and is free to start working in tech again, rather than worry… On the legal briefs, I think this is a great result for UK Technology and UK plc.”
This case is the latest fallout from HP's acquisition of Autonomy. Suchovan Hossain, Autonomy's former CFO, was sentenced to five years in prison in the US for fraud in 2019. Additionally, Deloitte, Autonomy's auditor, was fined £15 million in 2020 for misconduct.
In a 2022 UK civil trial, Judge Hildyard found that Lynch had indeed defrauded HP but suggested that the acquisition may have proceeded even with revised financial figures given the strength of Autonomy's technology and customer base. Damages in this case are still pending.
