Yes, I've been swotting up on court evidence in advance, says Autonomy founder Mike Lynch
No wonder he seems so well informed
Autonomy Trial Former Autonomy chief exec Mike Lynch sensationally admitted to London's High Court this afternoon that he has been reading courtroom evidence in advance of being questioned about it.
Barrister Laurence Rabinowitz QC, counsel for HPE, was asking Lynch about the transcript of a phone conversation the ex-CEO had with an internal whistleblower called Brent Hogenson.
HPE had previously tried to find a complete copy of the recording but could only locate snippets which it had had to stitch together, something Lynch blamed on his own struggles to record the call on his iPhone. Referring to how he had gained pre-hearing access to the full transcript of the call with Hogenson, on which he was being cross-examined earlier today, Lynch said: "I get them from anything that's loaded onto [case management and trial presentation platform] Magnum."
A surprised-sounded Rabinowitz replied: "So whilst the evidence is ongoing, you are being given documents which have been put on Magnum to review before you have given evidence?"
"Just myself, yes," replied Lynch, who had appeared remarkably well informed, for a High Court witness, about the contents and context of documents and events from a decade ago.
Mr Justice Hildyard, the trial judge, made no reaction as Lynch said he had been revisiting the evidence during his cross-examination. One of Lynch's spokespeople told The Register afterwards that his client's access to the electronic trial bundle, held on the courtroom Opus 2 Magnum system, had been pre-agreed with HPE's lawyers.
Prior to the revelation that Lynch had been doing the legal equivalent of reading his notes during a school exam, Rabinowitz had been cross-examining him about a deal Autonomy struck with Filetek in 2009. HPE alleges this deal was a fraudulent transaction designed to bulk up revenues in Autonomy's accounts.
It further claims that Filetek would have made a profit on the dodgy deal because Autonomy had "excess cash" and needed to meet its quarterly revenue target, and so didn't mind paying over the odds to get a licence for Filetek's Storhouse product. In return, Autonomy offered Filetek a licence for its Idol product.
When asked if he knew the deal was a fraud when he approved it, Lynch replied: "There's no way the purchase would be approved other than on its own merits."
Rabinowitz, referring to former top Autonomy salesman Christopher "Stouffer" Egan, who played a key role in the Filetek deal, said: "Mr [Sushovan] Hussain [Autonomy CFO and Lynch's co-defendant] knew Mr Egan had proposed buying Storhouse to enable Filetek to buy the Idol licence. I suggest you knew that as well."
"He knew there was a purchase going on," conceded Lynch. He later explained: "Any purchases or sales within two quarters of each other were treated as barter, reciprocal, quid pro quo, call it what you want. I don't believe Mr Hussain would have said that to Mr Egan because it was not how it was done by Deloitte."
This continued a theme of Lynch's evidence from the witness box where he mentions Deloitte's oversight of Autonomy's accounts over and again. In his witness statement, he wrote: "I now know that Deloitte were satisfied with the accounting treatment."
In close cross-examination by Rabinowitz about another Filetek deal, HPE's barrister put it to Lynch that he knew Filetek "appeared to lack financial capacity to pay Autonomy if they did not get paid" by a customer, something Lynch denied.
The court also saw some explosive and lengthy email rants by Lynch to his top management. The Register will be reporting on those in due course, as the trial continues. ®