David Davis criticizes extradition treaty after Mike Lynch’s acquittal

Sir David Davis, former chairman of the Conservative Party, has sharply 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, when it was sold to Hewlett-Packard (HP).

Davis stated that the acquittal is “a clear demonstration of how ridiculous” the extradition treaty is, suggesting it is having a “chilling effect” on British companies considering sales to American buyers. He warned: “Any sale to a US company is clearly viewed by the US Department of Justice as falling under US rules and regulations, wherever they are in the world.”

The 2003 treaty, intended to streamline the extradition process for serious offenders, was used to extradite Lynch, 58, for alleged fraud in the sale of Autonomy to HP in 2011. Davis, a long-standing critic of the treaty, voiced his concern that British entrepreneurs could face biased legal battles in the US long after their business dealings.

After a three-month trial in San Francisco, Lynch was acquitted late Thursday evening. Reflecting on the process, Davis commented: ‘If I were a British tech entrepreneur I would be very careful about any deal because I would never know that five or ten years later I wouldn’t be shipped off to America to face become with a partisan party. case before a partisan court.”

Other notable cases under the treaty include the extradition of David Bermingham, part of the “NatWest Three” linked to the Enron scandal, who served 37 months in a US prison. Davis emphasized that most U.S. federal cases, about 97%, are resolved through plea deals, which could force individuals into guilty pleas.

Founded by Lynch in 1996, Autonomy specialized in analyzing unstructured data from various sources. HP acquired the company in 2011 for $11 billion, with the aim of integrating its software capabilities into their product offerings. However, the deal collapsed, with HP accusing Lynch of financial manipulation to inflate Autonomy’s value. Lynch has consistently denied these allegations for the past thirteen years.

Describing the case as “silly,” Davis explained: “You have a sale of a British company on a British stock exchange, bought by a European subsidiary of Hewlett-Packard. They suddenly decide they’ve been ripped off after firing the CEO who bought it. It was ridiculous.”

After the acquittal, Lynch and Davis vowed to address what they said were shortcomings in the extradition treaty. Senior business leaders, including Sir John Rose and Lord Stevenson of Coddenham, have previously called for a halt to Lynch’s extradition, reflecting widespread concern within the business community.

Brent Hoberman, founder of Lastminute.com, celebrated the verdict on social media, saying: “Great news for British tech! Many British tech founders looked up to Mike and will be happy to see him acquitted.”

Suranga Chandratillake, partner at Balderton and former US CTO at Autonomy, added: “Mike Lynch is a remarkable technologist and entrepreneur. If this verdict means he is back in the UK and free to get back to working on technology, rather than worrying about legal instructions, then I think this is a great outcome for British technology and UK plc.”

This case is the latest consequence of the acquisition of Autonomy by HP. Sushovan Hussain, Autonomy’s former chief financial officer, was sentenced to five years in the US in 2019 for fraud. In addition, Deloitte, Autonomy’s accountant, was fined £15 million in 2020 for misconduct.

In a 2022 UK civil trial, Mr Justice Hildyard found that Lynch had indeed defrauded HP, but noted that the takeover could go ahead even with adjusted financials due to the strength of Autonomy’s technology and customer base. Compensation in this case is still pending.