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LONDON : Shareholders in Darktrace on Thursday voted against the election of non-executive director Patrick Jacob over concerns about his connection to Mike Lynch, the entrepreneur extradited to the United States to face fraud charges.
Lynch’s Invoke Capital was a founding investor in Darktrace, giving it the right to nominate a representative to its board and Jacob joined after last year’s AGM. But he was rejected in his first vote on Thursday, with 57 per cent of votes cast opposing his election, according to a stock market announcement.
Lynch, who was charged with fraud over the sale of his company Autonomy to Hewlett Packard for $11 billion in 2011, and his wife hold more than 9 per cent of Darktrace’s shares, according to LSEG data. Lynch has denied any wrongdoing.
One top-20 shareholder informed Darktrace it would be voting against Jacob due to his association with Invoke and Lynch.
“Mike Lynch’s trial in the U.S. creates unhelpful headline risk for Darktrace, which we view as unwarranted, so any move to distance Darktrace from these headlines is a positive in our eyes,” the shareholder, which asked not to be named, said.
“Additionally, we do not believe granting a board seat to Invoke is conducive to helping Darktrace develop and mature as a global business and investment.”
Darktrace has sought to distance itself from Lynch, saying he plays no part in its operations and is not on its board.
Two other directors, David Willetts and Peter Bonfield, were backed by shareholders but received less than 80 per cent of votes cast.
Darktrace said it would engage with shareholders on all three votes to understand their concerns.
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