Julia Irvine 14 May 2019 12:13pm

Ex Autonomy CFO jailed for five years

Former Autonomy CFO Sushovan Hussain has been fined $4m (£3.09m) and sentenced to five years’ imprisonment in the US after being found guilty of fraud over the sale of the software company to Hewlett Packard (HP) in 2011

He was also ordered to forfeit the $6.1m proceeds he received from the deal.

Prosecutors had argued for a 12-year prison sentence for the ICAEW chartered accountant who last year was found guilty on 16 counts of wire and securities fraud, including artificially inflating Autonomy’s share price ahead of the $11.1bn sale to HP. He is appealing his conviction.

A year after the sale, HP wrote off $8.8bn, accusing Autonomy and its board of accounting fraud. Hussain was charged in the US, alongside Autonomy’s founder and chief executive, Mike Lynch, and former vice president of finance Stephen Chamberlain.

Both Lynch and Chamberlain have yet to be tried. Chamberlain, who is also an ICAEW member, is facing 15 counts of fraud to which he has pleaded not guilty.

HP is also suing Lynch and Hussain for $5bn damages through the civil courts in London. The trial is currently underway.

Commenting on Hussain’s conviction, an HP spokesperson said, “As we have consistently maintained, Hussain engaged in outright fraud and deliberately misled the market about non-existent sales through a series of calculated sham transactions. Autonomy manipulated their revenue and quarterly results, making an accurate valuation impossible.

“That Hussain attempted to depict the fraud as nothing more than a misunderstanding of international accounting rules was, and still remains, penitently ridiculous – and he has now been held accountable for his role in defrauding HP.”

Meanwhile, the UK Financial Reporting Council (FRC) has agreed to stay formal complaints against both Hussain and Chamberlain until the outcome of the criminal charges against them. In return, both have agreed to their ICAEW membership being suspended.

The FRC says that Hussain’s stay will remain in place pending the outcome of his appeal.