Mike Lynch, who has died aged 59, was one of the UK’s most successful digital entrepreneurs, as a co-founder of Autonomy, a Cambridge-based software business which he sold for $11billion to Hewlett-Packard of the US – only to find himself accused of criminal fraud in relation to the terms of the sale. Extradited to face trial in California, he was eventually, and most unusually in the US justice system, acquitted of all charges.
Lynch was sometimes referred to as “the British Bill Gates”. Autonomy, founded in 1996 by Lynch and two partners, was a forerunner of the “big data” revolution as a pioneer of search technologies in “unstructured” data sources such as emails, voicemails and videos. A flagship of “Silicon Fen”, the cluster of innovative, science-based businesses that grew up on the outskirts of Cambridge, it floated on the London Stock Exchange in 2000 with Lynch as its chief executive and a valuation of £4 billion.
The 2011 takeover of Autonomy by the US IT giant Hewlett Packard (HP) for $11 billion – a premium of some 80 per cent to its then stock-market value – reaped a fortune of more than half a billion pounds for Lynch but drew him into a legal entanglement that would consume 12 years of his life. Following senior management changes, HP claimed it had been sold a fraudulent package, wrote off $9 billion of Autonomy’s value and initiated proceedings against Lynch and other Autonomy executives.
Lynch’s initial stance was that, as he was a British citizen running a London-listed UK company any charge against him should be heard in a British court.
The UK Serious Fraud Office examined the file, and dropped it on grounds of insufficient evidence, but US prosecutors pressed their case under the 2003 UK-US extradition treaty (conceived in the Blair-Bush era as an anti-terror measure) in which it was sufficient for the US merely to assert allegations rather than provide prima facie evidence when seeking an extradition from the UK.
Once the then Home Secretary, Priti Patel, had finally approved the extradition in January 2022, many observers believed Lynch was destined for a long stay in an American prison cell.
Only one in eight US fraud prosecutions ends in acquittal – most defendants resorting to plea-bargaining in the face of insuperable legal costs – and the same judge in the same courtroom had already convicted Autonomy’s finance director of parallel charges.
Lynch’s defence was, first, that he himself had never been closely involved in the detail of the deal – and most importantly that HP executives had themselves destroyed Autonomy’s value by mishandling an acquisition they did not properly understand.
But a civil fraud case brought by HP in the High Court in London (which remains to be settled) had already found against him, and after further appeals failed, Lynch was flown to San Francisco in May 2023 and held under house arrest, at his own expense, until his trial began in March this year.
As it proceeded, Lynch was sufficiently self-confident (an attribute he had never lacked) to face his accusers from the witness box. But his fate looked sealed as the prosecution called witness after witness to present complex accounting details while the judge excluded key evidence of disagreement within HP as to the real reasons for the Autonomy write-down.
At one stage, Lynch’s lawyers petitioned for a mistrial after the prosecutor asked what they claimed were “highly improper questions intended to prejudice the jury against Lynch” by highlighting his personal wealth.
Nevertheless, Lynch himself said later that he began to sense the mood of the court shifting his way. In the end, the jury threw out all 15 charges against him and Lynch’s lawyers spoke of “a resounding rejection of the [US] government’s profound overreach”.
Michael Richard Lynch was born in Ilford, Essex, on June 16 1965 to Irish parents; his father Michael was a firefighter while his mother Dolores was a nurse. Educated on a scholarship to Bancroft’s School in Woodford, he went on to study natural sciences at Christ’s College, Cambridge, and completed a PhD in the field of neural networks, with a thesis entitled “Adaptive techniques in signal processing and connectionist models”.
While still a doctoral student, Lynch created a first business designing audio products for the music industry. In 1991 he founded Cambridge Neurodynamics, which specialised in computer-based fingerprint recognition and from which Autonomy was one of several spin-offs.
After the sale of Autonomy, Lynch used part of the proceeds to establish a venture capital partnership, Invoke Capital, through which he backed other innovative start-ups. Among these was Darktrace, a cyber security company founded in 2013 and listed on the London stock exchange in 2021. A recent takeover offer from a US private equity group valued the stake held by Lynch and his wife in Darktrace at almost £300 million.
Lynch returned to England after his acquittal exhausted by the experience but to meet something of a hero’s welcome: one columnist called him “a hostage released from the ruthless clutch of US justice”. He was under no illusion that he had only been able to prove his innocence because, unlike other British defendants lifted across the Atlantic under the controversial treaty, he had a fortune which enabled him to afford limitless legal costs.
“The reason I’m sitting here, let’s be honest,” he told the BBC on his return, “is not only because I was innocent... but because I had enough money not to be swept away by a process that’s set up to sweep you away.”
He was a non-executive director of the BBC from 2007 to 2012, a board member of the British Library and the Crick Institute, a trustee of Nesta, a foundation which supports innovation for social good, and a Fellow of the Royal Society. He was appointed OBE in 2006.
In private life Lynch was a devoted family man and a popular figure in Suffolk, where he was a deputy lieutenant of the county, a generous supporter of charities and a keeper of rare-breed cattle on his estate near Woodbridge. He wore his intelligence lightly and was at ease among neighbours who remained strongly supportive throughout his legal ordeal. He also enjoyed playing jazz saxophone.
Lynch died after his yacht Bayesian sank in a freak tornado off the coast of Sicily; his 18-year-old daughter Hannah also died. His wife Angela Bacares, whom he married in 2001, survived the disaster; their elder daughter Esme, who was not reported to have been on board, also survives him.
Mike Lynch, born June 16 1965, death reported August 22 2024
