Man overboard! CA chief Kumar walks plank...
Lands in comfortable billet
Sanjay Kumar, Computer Associates' chief executive, has become the latest casualty of the marathon investigation into the software vendor's finances. After four years at the top, he has been forced to step down as chairman and chief exec, surrendering these roles to become CA's chief software architect, a new position. In addition, Kumar has resigned from CA's board.
CA has left the chief executive position open. Lewis Ranieri, who has served as the Board's lead independent director since 2002, has been elected chairman.
A Securities and Exchange Commission investigation into financial irregularities at CA concluded with a threat to sue the company. Last year, CA's own audit committee concluded that the company had booked forward bookings as current revenue in a bid to inflate its results for fiscal 2000. CA says it has cleaned up its act, with the adoption of a new business model in October that year. The company settled with investors over the accountancy wheeze in August 2003.
Three former finance executives, including Ira Zar, CA's former chief financial officer, pleaded guilty to fraud or obstruction of justice charges earlier this month. Investigations may result in further charges or earnings restatements by CA, the company say. This week the CA board audit committee axed four employees from the legal department and five from finance.
Said CA's Ranieri: "The audit committee's and the entire board's exhaustive review of these matters resulted in the removal of a number of individuals from the company. The changes in Sanjay's role are not based on the conclusion that he engaged in any wrongdoing. Nonetheless, the conduct in question occurred during his tenure, and the board felt this action was appropriate." ®
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