LYNCH AND OTHER BAYESIAN YACHT PASSENGERS FEARED DEAD, COAST GUARD SAYS

(Bloomberg) -- After two days of search-and-rescue efforts, British tech entrepreneur Mike Lynch, Morgan Stanley International chairman Jonathan Bloomer and four others were feared dead aboard the sunken wreckage of a luxury yacht off the coast of Sicily.

As rescue operations drew to a close on Tuesday, Italian coast guard spokesman Vincenzo Zagarola said: “It would be reasonable to think that we are more likely to find the missing people inside the boat.” The search, however, will continue, he said.

Crews, aided by military ships and helicopters, have been looking for the six missing passengers since Monday when the Bayesian yacht was hit by a tornado near Porticello, Sicily. Six guests, including Lynch’s wife Angela Bacares, and nine crew were rescued. One person has died.

In an interview with the PA news agency, Zagarola was asked whether the remaining passengers would be found alive. “Reasonably the answer should be not,” he said.

Lynch, 59, and his family were celebrating his recent acquittal from fraud charges with a small group of advisers when the violent storm struck. The charges stemmed from Lynch’s sale of his software firm Autonomy Corp. to Hewlett Packard Co. in 2011. The Silicon Valley giant went on to accuse Lynch of accounting failures. He’d spent years working to clear his name in court and restore his reputation as one of Europe’s most successful entrepreneurs.

A little over two months before the yacht accident, a San Francisco jury found Lynch not guilty of criminal charges that he duped HP into overpaying for his company. He was still fighting HP in a civil case in London, where a British judge held him responsible for creating the illusion of a company much larger and more successful than it really was.

Lynch and his daughter Hannah, Bloomer and his wife Judy and Clifford Chance partner Chris Morvillo and his wife Neda were identified as the missing passengers on Tuesday by the head of the civil protection agency in Sicily, Salvo Cocina.

In their efforts to find the missing passengers, firefighters signaled they were having difficulties gaining access to the yacht, which is 48 meters (157 feet) below the surface. They called the operation “complex.” The local coast guard said divers are “evaluating the feasibility of safely entering the wreck, an operation which has become complicated from the depth and position of the hull.”

The searches are now being conducted with the help of a remote-controlled underwater vehicle, capable of operating on the seabed for over two hours, according to a statement from the coast guard.

Italian authorities have already begun a probe into the sinking. The UK’s Marine Accident Investigation Branch, which looks into marine accidents involving British vessels worldwide, has sent four inspectors to Sicily to conduct a preliminary assessment, according to a spokesperson for the Department for Transport. They will speak to the local authorities and emergency service crews to determine whether they need to launch an investigation.

An investigation would involve speaking to crew, passengers and other witnesses and collecting physical and digital evidence, for example examining logbooks, crew qualifications and any voyage recorder data.

The UK ambassador had also flown to Palermo Monday to meet with officials and the families of the victims, the embassy said.

“The search will go on as long as necessary,” Zagarola added. “For sure the whole hull will need to be inspected meter by meter.”

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By late Tuesday night, however, vessel activity around the makeshift firefighter camp along Sicily’s coast had died down, as was to be expected with lower visibility. Camera crews, stationed in front of a monument to the Virgin Mary that is intended to protect sailors, had finished their interviews for the day. An almost religious silence hung in the air.

Full operations would resume after sunrise.

--With assistance from Olivia Solon.

(Updates with additional context from coast guard, paragraph on MAIB.)