Darktrace, Indeed

Skwawkbox writes:

Keir Starmer has appointed newly-ennobled ‘entrepreneur’ Poppy Gustafsson to the Labour front bench as ‘Minister for Investment’. But Gustafsson’s history has been highlighted and questioned by Private Eye – with the tongue-in-cheek comment that “others may wonder if she is less an entrepreneur who knows about growing business and more a practitioner of the less economically productive dark arts of creative accounting”.

Announcing the new role, Starmer called Gustafson ‘an accomplished entrepreneur who brings invaluable experience to the role’ of bringing investment into the UK – but neglected to mention that she is also closely linked to a notorious corporate scandal that left one colleague in prison in the US and another ruled by the UK High Court to have acted fraudulently.

Gustafsson’s CEO role at cybersecurity firm Darktrace was mentioned by Starmer, but not that Mike Lynch, the owner of the firm, knew her before that role because she was ‘European Financial Controller’ at another of his firms, ‘Autonomy’, which he then sold to Hewlett Packard.

But Lynch was found by the High Court to have acted fraudulently to inflate the perceived value of the business before the sale, while his finance director Sushovan Hussain ended up in jail in the US for the fraud. The High Court judgment reveals that Gustafsson was involved in transactions linked to the fraud. The fraud included an ongoing ‘ruse’ that involved creating fake sales value by selling stuff and software services to customers who would get the premium prices discounted later, building misleading sales figures and making the firm look more profitable than it was.

High Court judge Mr Justice Hildyard said of this dishonest practice that its

purpose was to cover shortfalls in software revenues and perpetuate the appearance of meeting revenue forecasts, [so] their true nature was being concealed and their effect on Autonomy’s trading performance was being disguised.

He found that Gustafsson was ‘aware of the hardware reselling strategy’ and that her attempt to excuse her role in the selling of software packages – she had admitted she had ‘literally no idea’ what she was selling – that were of little or no use to clients was ‘not convincing’.

It certainly didn’t change the metrics I was putting in… I have no idea of what any of [the listed products] is… what’s a kick-start metadata? I have literally no idea.

Poppy Gustafsson at the High Court.

the only rational explanation for Ms Gustafsson being tasked with putting together the software offering was that it was primarily driven by accounting considerations…her attempt to explain her role was not convincing.

High Court judge Mr Justice Hildyard.

Hildyard found the firm guilty of ‘improper accounting and misstatement of recognised revenue’ and a ‘breach of duty and improper use of power’.

Keir Starmer’s team is no stranger to the use of a little creative accounting, including Chancellor Rachel Reeves’s description of large donations for designer clothes, in her official declaration of interests, as ‘office support’. Deputy PM Angela Rayner accepted similar donations and declared them as a ‘donation in kind for undertaking parliamentary duties’ and as ‘support’ for her ‘capacity as deputy leader of the Labour Party’.

Ms Reeves has also been accused of making up her employment history, claiming she was an economist for Lloyds Bank while a former boss said she was in reality a ‘complaints support manager’.