Shareholders of British cybersecurity firm Darktrace (DARK.L) have voted against the appointment of non-executive director Patrick Jacob, citing concerns about his association with Mike Lynch, an entrepreneur facing extradition to the United States on fraud charges.
Lynch’s firm, Invoke Capital, was an initial investor in Darktrace, granting them the right to nominate a representative to the company’s board.
Jacob had joined the board after the previous year’s AGM. However, in the recent vote, 57% of shareholders opposed his election, as announced in the stock market.
Mike Lynch faces charges of fraud related to the sale of his company, Autonomy, to Hewlett Packard for $11 billion in 2011.
Lynch and his wife hold over 9% of Darktrace’s shares, according to data from the London Stock Exchange, and Lynch maintains his innocence.
One major shareholder, who chose to remain anonymous, informed Darktrace of their intention to vote against Jacob’s election due to his ties to Invoke and Lynch.
They expressed concern that Lynch’s ongoing trial in the U.S. could create negative publicity for Darktrace.
The shareholder stated, “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.
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.”
A spokesperson for Invoke Capital acknowledged Patrick Jacob’s contribution to the Darktrace board and indicated their intention to nominate a new representative from Invoke Capital in the future.
Darktrace has been proactive in distancing itself from Mike Lynch, emphasizing that he does not have any involvement in the company’s day-to-day operations and is not a member of its board.
While two other directors, David Willetts and Peter Bonfield, received shareholder support, they received less than 80% of votes cast.
Darktrace has expressed its intention to engage with shareholders to better understand their concerns regarding all three votes.