A founder who sold his company for $260 million is being sued by the company that bought it

Eric PulierServiceMeshEric Pulier

These are strange times for the 56-year-old IT giant, Computer Sciences Corp.

CSC has filed a lawsuit accusing one of its star executives, Eric Pulier of fraud connected to an alleged bribery scandal in Australia.

CSC is accusing Pulier  — former CEO of ServiceMesh, which CSC bought — of making “authorised payments” to two Australian bank executives.

The company is seeking to recoup the full $US98 million it paid to ServiceMesh shareholders, according to a CSC statement cited by Forbes

Pulier is apparently denying the allegations, according to information included in CSC’s lawsuit although we have not been able to contact him.

Here’s what we know:

Pulier joined CSC to lead its cloud computing efforts after CSC bought a company he co-founded, ServiceMesh, for over $US260 million in 2013.

Last week, CSC filed a lawsuit against Pulier seeking to get a good chunk of its money back.

Pulier resigned in late April after allegations of bribery surfaced. He quit right before CSC was about to fire him, a CSC spokesperson told Business Insider.

The CSC lawsuit accuses Pulier of making illicit payments to IT executives at an Australian bank, Commonwealth Bank of Australia, which signed multiple big contracts with ServiceMesh.

This contract helped Pulier earn an extra $US25 million equity “earnout” bonus from CSC, after it bought the company, the lawsuit says. 

All told, CSC paid $US47 million cash to Pulier, the largest shareholder of ServiceMesh, and another $US26 million granted as restricted stock units.

CSC says it offered a huge, additional bonus

CSC paid over $US260 million to buy ServiceMesh, including $US93.1 million in cash, it said in the lawsuit.

CSC agreed to pay more than the original cash price if ServiceMesh brought in more than $US20 million of revenue within a few months after the deal closed. Specifically, it offered to pay more than $US10 for every additional $US1 of extra business brought in, up to a max of $US33.5 million, explains the lawsuit.

An additional $US12 million of revenue in that period came from a bunch of contracts from the Australian bank, according to the lawsuit. With those contracts, the lawsuit says, the $US20 million floor was exceeded by nearly $US9.7 million. So CSC  shelled out another $US98 million-plus to ServiceMesh equity holders. “That included a $US25.3 million+ bonus to Pulier,” CSC says in its lawsuit.

After Pulier received the $US25 million, he founded a company called Ace, which paid more than $US2 million to the two senior IT executives at the bank, the lawsuit claims. The two IT executives at the Australian bank have been arrested on charges of commercial bribery, according to the lawsuit. They are pleading innocent.

Although Pulier could not be reached for comment, Pulier’s lawyers have accused the banks of “making false statements about him,” according to the CSC lawsuit.

CSC says that it is cooperating with all authorities and says that Pulier refused to fully cooperate with its internal investigation.

To be clear: although there have been arrests, a lawsuit, and plenty of accusations, no one has yet been convicted of any crimes. Pulier has only been hit with civil litigation and has not even been charged with a crime.

Pulier is nowhere to be found

Meanwhile, Pulier is difficult to locate. His Twitter account is gone. Neither his address nor his legal representatives were named on the lawsuit CSC filed. (We reached out to several people who know him, including others from ServiceMesh, and will update this post when we hear back.)

Prior to this scandal, Pulier was a respected software exec in his field, who founded several companies, including Akana (which just changed its name to SOA Software).

CSC Mike LawrieCSCCSC CEO Mike Lawrie

Pulier was chairman of SOA. Akana no longer lists him on its leadership page, although it also doesn’t say that someone else is serving as chairman. (We repeatedly contacted Akana asking for comment and will update if we hear back.)

Pulier also co-founded several other bubble-era companies: Interactive Video Technology, Desktone, US Interactive.

He was an adviser to Al Gore and a contributor to Bill Clinton’s Clinton Global Initiative. And he’s been a board member to a long list of other tech companies.

Embarrassment for CSC

The is not a happy situation for CSC and its CEO, Mike Lawrie. Like other old-school IT companies such as IBM and Oracle, Lawrie has been trying to transform CSC into a cloud computing powerhouse and Pulier, along with ServiceMesh, were key to his plans.

CSC has been on shakey ground in recent years, with revenue shrinking, as companies increasingly turn to cloud computing, instead of old-school data center tech.

Under pressure to turn CSC around, Lawrie and team just this week announced they were going the Hewlett-Packard route and would split the venerable old company into two publicly traded companies.

Meanwhile, prior to this scandal, Pulier had been big on the speaker circuit, representing the new CSC. Here’s just one tweet from a talk he gave last year.

Here’s the full statement sent to us by CSC:

On May 11, 2015, CSC sued Eric Pulier, the former CEO of ServiceMesh, who resigned from CSC in late April shortly before his employment was to be terminated by CSC due to violations of CSC’s code of business conduct related to conflicts of interests and appearance of improprieties. The lawsuit concerns unauthorised payments Mr. Pulier made to two executives of Commonwealth Bank of Australia, a CSC client, shortly after he received tens of millions of dollars from CSC’s 2013 acquisition of ServiceMesh.

CSC’s lawsuit seeks to recover the damages caused by Mr. Pulier’s fraud, breach of contract, and breach of fiduciary duties, including recovery of all payments to Mr. Pulier under the acquisition agreement and the full amount of the $US98 million earnout payment paid to ServiceMesh equityholders under the acquisition agreement. If not for revenue from contracts between ServiceMesh and Commonwealth Bank of Australia, Mr. Pulier and the other ServiceMesh equityholders would have received no earnout payment at all.

CSC’s investigation into the Australian authorities’ allegations of bribery involving Mr. Pulier and the ACE Foundation is continuing and CSC is cooperating with all relevant authorities.

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