From riches to ankle bracelet: UK tech tycoon Mike Lynch’s stunning fall

London: Mike Lynch, the technology tycoon, once dubbed Britain’s Bill Gates, has spent the past 10 months in San Francisco, with a GPS bracelet strapped to his ankle and two armed guards monitoring him around the clock. This week he heads to court to face a long, hard fight for his freedom.

It’s been 13 years since one of Silicon Valley’s most storied companies bought Lynch’s business in a blockbuster takeover that seemed to confirm his image as one of the UK’s most brilliant technologists. Now that deal is at the center of a criminal fraud trial. If convicted, Lynch could spend up to 25 years in jail.

It has been a stunning fall from grace. As co-founder of Autonomy, a software firm that became one of the shining lights of the UK tech scene, Lynch was lauded for his achievements in business: awarded an OBE (Order of the British Empire) for services to enterprise in 2006, and appointed in 2011 to the science and technology council of the then prime minister, David Cameron. He served on the board of the BBC, and established an investment firm that backed Darktrace, the cybersecurity firm.

Now Lynch is about to embark upon an arduous battle to persuade a jury that the highlight of his career – Autonomy’s acquisition by Hewlett-Packard – was not built on a pack of lies.

The odds against him are high. US federal prosecutors have a fearsome record and most defendants would rather plead guilty than go to trial. Analysis by the Pew Research Center last year found that, of 71,954 defendants in federal criminal cases in 2022, only 2.3% went to trial. Just 0.4% were acquitted.

Lynch, who has pleaded not guilty, will need to dismantle the allegations surrounding how he constructed, led and presented Autonomy to the world. Attention in the courtroom is likely to turn swiftly to one Thursday afternoon in August 2011.

Ten minutes after Wall Street closed for the day, HP revealed a master plan. The world’s largest maker of personal computers had had enough of making personal computers – and wanted to transform from hardware manufacturer to software giant. The only snag was that software was responsible for just 3% of its sales.

Autonomy, a fast-growing and much-hyped software and data company that counted Coca-Cola and Nestlé among its clients, looked like the answer.

HP agreed to buy Autonomy in a £7bn ($10bn) deal to “accelerate our strategic vision to decisively and profitably” dominate the software industry. Léo Apotheker, HP’s CEO, declared its purchase to be “highly profitable and globally respected”, with an “attractive business model” and “well-regarded” management.

For Autonomy, and the man who built it, the acquisition was an extraordinary (and lucrative) endorsement. “This is a momentous day,” said Lynch.