Kumar to return $800m to CA shareholders
Assuming he lives to be 250 years old
Sanjay Kumar, the disgraced former CEO of Computer Associates, is to pay $798.6m in restitution to victims of the company's $2.2bn accounting fraud. Well, he would if had the money...
Kumar will liquidate his assets and family trusts to pay at least $52m before being whisked off in August to begin a 12-year prison term. CA has already paid $225m in restitution, which has yet to be doled out to shareholders. The paybacks will kick-off in July when Kumar's first tranche is expected, according to reports.
After serving jail-time, Kumar is obliged to pay 20 per cent of his annual income to pay off the remaining $748m. The government does not expect to see him pay the full amount.
US District Court Judge Leo Glasser for the Eastern District of New York approved the terms today.
Kumar was sentenced to 12 years in prison and fined $8m by Glasser in November. Under today's settlement, the fine is dropped to ensure that the amount that goes to shareholders is maximised.
Kumar pled guilty to instituting and enforcing CA's "35-day month," where company software license revenue was backdated to closed fiscal quarters to meet Wall Street profit expectations and ensure massive bonuses for him and some other senior staff.. He was also convicted for obstruction of justice for lying to to investigators and authorizing bribes to potential trial witnesses when the fraud was first exposed.
Computer Associates, now called CA Inc., was forced to restate five years of figures, costing the company an extra $15m.
Kumar is also facing a $14.9m lawsuit filed by CA seeking to recover legal fees the company paid to defend him. ®