The sorry tale of L&H

Take Robert Downey Jnr's acting career collapsing in a misery of drugs and booze. The comparison with the final downfall of Jo Lernout and Pol Hauspie is difficult to miss.

Cocaine wasn't Lernout and Hauspie's poison, but it's much the same story - a young company flying too high, too fast, and collapsing in a flurry of fraud.

This is not a typical dot-com doom scenario. Lernout, Hauspie and their colleagues were not a couple of yahoos straight of business school with nothing but a PowerPoint presentation and smooth tongues.

They had leading technology in an extremely exciting market that all their rivals were pouring money into hand over fist. Until recently, it looked like Lernout and Hauspie could take them all on and win.

Last June, they took over Dictaphone and Dragon Systems for a combined value of over $1bn. But since then, it's been downhill.

The details of their downfall are squalid and tragic and not even worth repeating here. But with over $373m of overstated sales still to be explained, Jo and Pol are looking at a very large bowl of whatever Belgians eat instead of porridge.

And the stain could spread even further - the whole board, KPMG, even Microsoft, who had a non-executive director on the board, could be implicated. Angry shareholders will go after them all.

It's a blow to Europe's tech sector, where few enough companies have the clout that L&H once had.

Belgium's trump card in the new European economy is the fantastic language skills of its population, and L&H had become a symbol of a new Belgium, using its linguistic diversity not as a source of division but of economic strength.

The news is especially tragic, seeing how L&H technology was expected to ship as the standard speech recognition technology in the next generation of Microsoft's desktop operating system.

Microsoft baiters will no doubt be amused, but a smattering of sleaze will hardly be noticed by the Redmond behemoth. It might even be able to swallow up the choice scraps of L&H on the cheap - if any staffers stick around long enough for it to happen.