Mike Lynch resigns as Darktrace advisor as he resists US extradition
Lynch still protests his innocence despite mounting evidence to the contrary
British tech tycoon Mike Lynch has stepped down as an adviser to UK cyber security firm Darktrace, about a week after Home Secretary Priti Patel approved his extradition to the United States to face criminal fraud charges related to the sale of Autonomy.
Patel's green light to the extradition came after London High court's ruled against Lynch in a court challenge, brought by HP, over the deal.
As reported by The Telegraph, Lynch has resigned from his advisory role at Darktrace and has also quit Luminance, the AI start-up backed by his venture capital firm Invoke.
Lynch stepped away from Darktrace's board of directors in 2018 when he was first charged, but remained on its Science and Technology Committee. Later, he also relinquished his position as a government adviser and a role at the Royal Society.
Despite his resignation from the Science and Technology Committee, Lynch remains Darktrace's largest shareholder.
Launched in 2013, Darktrace boasts clients such as Coca-Cola and Siemen, and continues to post growth: its revenues rose more than 40 per cent in 2021, to £281.3 million. The company employs more than 1,200 people, with headquarters in Cambridge and San Francisco.
Luminance, which uses AI technology to discover anomalies in documents, was valued at $100 million (£74 million) in a financing round in 2019.
"We can confirm that Mike Lynch offered to step down from the board whilst he focuses on fighting his appeals and clearing his name," a Luminance spokesperson told The Telegraph.
"Dr Lynch has been an invaluable advisor to Luminance and we thank him for his contribution. We are pleased to have another Invoke partner, Charlotte Golunski, join the board of directors and welcome Invoke's continued support for the business."
The 57-year-old Lynch is fighting a $5 billion civil complaint brought by HP Enterprise in the London's High Court.
Lynch founded Autonomy in 1996 and sold it to Hewlett-Packard (HP) in 2011 for $11 billion. Just a few months later HP wrote down Autonomy's value by $8.8 billon, claiming that Lynch and former chief financial officer Sushovan Hussain had inflated the company's revenues to make it look more valuable than it actually was.
Lynch faces 17 charges in the USA, including wire fraud and conspiracy, over the deal.
In November 2019, the US Department of Justice asked the UK government to allow his extradition to face trial in a US court.
Lynch denied all accusations, arguing that HP had mismanaged the acquisition and was trying to "shift the blame". He also filed a countersuit for loss and damages.
"HP has a long history of failed acquisitions. Autonomy was merely the latest successful company it destroyed. HP has sought to blame Autonomy for its own crippling errors, and has falsely accused Mike Lynch to cover its own tracks," Lynch's lawyers said.
Despite those arguments, the UK's High Court ruled last month that HP had largely succeeded in showing that Autonomy executives had falsely inflated the firm's declared revenue, earnings and valuation.
Mr Justice Hildyard said in a summary of his judgement that Lynch and Hussain had been "dishonest," using a variety of tactics that artificially inflated reported sales.
They concealed the sale of hardware and engaged in complex reselling schemes to mask a deficit in sales of Autonomy's software, according to the judge.
Lynch's lawyers said they would appeal the court's ruling, as well as the Home Secretary's decision to approve his extradition to the US.