Ill-fated British software company Autonomy's one-time US sales chief is reluctant to testify in person against former CEO Mike Lynch, the High Court in London heard yesterday morning.
HPE, which is suing Lynch in the UK over the $8.8bn writedown of Autonomy after buying the firm in 2012, wants to call Christopher Egan to give live evidence.
Lynch, it was said, opposes this, in part because the one-time Autonomy salesman secured a "deferred prosecution agreement" in return for co-operating with American federal prosecutors. In legal filings Lynch's lawyers said they wanted to put it to Egan in person that his witness statement "is, in large part, false".
Egan himself is not keen on appearing in the UK court either, it transpired. His witness statement for the London civil trial "contains evidence that is strongly supportive of the Claimants' case", according to legal filings from Lynch's lawyers.
Both HPE and Lynch initially thought Egan would come to London for cross-examination in court: however, Egan later said he had had enough of giving evidence to courts after former Autonomy CFO Sushovan Hussain's criminal trial in the US.
Barrister Laurence Rabinowitz QC, on behalf of HPE, told Mr Justice Hildyard yesterday morning that Egan has "said he's not coming, we can't compel him to, your lordship can't compel him… He's given enough evidence, he's been cross-examined, the position he takes is that he will not come. There is no point in us saying it'll be better for him. We asked him to turn up here, he has refused us."
Egan, an American citizen in California, cannot be forced by the High Court to travel to London. Nor was it clear whether making him testify over video link would give the judge legal powers to force him to answer questions, as could be done to a witness physically present in an English courtroom. HPE asked the court to order Egan to testify over video link from a local law firm, Farella, Braun & Martell.
Nope, not going there to give evidence
The judge also wondered why Egan, who went to the trouble of writing a witness statement, suddenly didn't want to testify.
"If you were a cynic," mused Mr Justice Hildyard out loud in court yesterday, "you'd say Mr Egan, in exchange for a deferred prosecution, [having] paid $1m, has agreed not to do other things. That was his deal with his prosecutors."
Stung, Rabinowitz immediately began speaking over the High Court judge, saying that HPE was facing accusations "consistently from the other side of the court, of us somehow orchestrating this [US criminal] prosecution… We are not able to decide who procured the deferred prosecution agreement."
A soothing Mr Justice Hildyard replied: "If I suggested in any way you did, I didn't mean to suggest that. What I mean to say – you'll have a go in reply – all I'm putting is for you to take onboard, is – I can see this point that when you have someone who has been in the predicament of Mr Egan abroad, there is at the very least an increased risk that they will not wish to attend for further cross-examination in the UK. A risk so obvious that one might be expecting it to be covered absolutely when securing his witness statement. I'm not saying you did or didn't but that is what suggested."
HPE is suing Lynch and former Autonomy CFO Sushovan Hussain for more than £3.4bn ($5bn) over allegations they cooked Autonomy's books. As Autonomy's former US sales chief, Egan could potentially give powerful testimony against the two C-suite officers, with HPE's lawyers alleging that Egan "personally concluded many of the transactions that are in issue in this case".
As we reported in 2017 when he won his deferred prosecution agreement, based on Egan's "willingness to come forward and confess his wrongdoing", US federal lawyers said they had agreed "not to prosecute the defendant for any other conduct arising out of the investigation that led to the information". He also paid "almost $1m by way of disgorgement and interest," according to HPE legal filings seen by The Register. ®