Martin Vander Weyer Martin Vander Weyer

Is the airline ‘booking surge’ a load of hot air?

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Be glad you’re not in Dr Mike Lynch’s shoes. A London judge has ruled that the founder of the Cambridge-based software venture Autonomy can be extradited to the US to face multiple fraud charges in relation to the takeover of Autonomy in 2011 by Hewlett-Packard of California. This was, undoubtedly, a disastrous purchase: HP paid a huge premium over Autonomy’s market value, swiftly found all was not as expected, wrote off most of the $11 billion price and accused Lynch of having artificially inflated the company’s numbers. His fate now hangs in the legal balance.

The Serious Fraud Office looked at the file but dropped it on grounds of insufficient evidence; meanwhile, judgment in a £3.8 billion civil action against Lynch is not due until September. But US prosecutors have pressed their case under a 2003 UK-US extradition treaty, which made it sufficient for the US merely to assert allegations rather than provide prima facie evidence when requesting an extradition from the UK. Conceived as an anti-terror measure, the unequal treaty has been used to extradite businessmen such as the ‘NatWest Three’ — David Bermingham, Gary Mulgrew and Giles Darby — whose dealings from the UK with the fraud-ridden Enron Corporation in Texas drew them into a US judicial nightmare, ultimately forcing them to plea–bargain for shorter sentences.

Whatever the rights and wrongs of this tale, Lynch was an entrepreneur from Essex running a London-listed UK company. Whenever US prosecutors have corporate suspects in their sights, they tend to ignore the issue of ‘extraterritoriality’ — whether or not any relevant offence might have been committed on US territory — and subject defendants to such pressure and cost that plea bargaining becomes their only viable option. You might say that’s the American way of encouraging rampant capitalism to behave itself — but before throwing any British citizen into its jaws, you’d want to be very sure he has a clear case to answer.

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