The End For CA's CEO?

Apr 19, 2004

CIO Update Staff

As a federal criminal investigation of Computer Associates International enters its final stages, the company's board will meet as early as tomorrow to consider the fate of Sanjay Kumar, its chairman and chief executive, according to three people who have been briefed on the board's plans.

Up to a dozen employees may lose their jobs as the company moves to resolve investigations, these people said.

Mr. Kumar has not been charged with wrongdoing, but he has become a focus for prosecutors in Brooklyn, who are investigating accusations of accounting fraud and obstruction of justice at Computer Associates. The investigation gained momentum earlier this month, when three former executives pleaded guilty to charges of obstruction and securities fraud.

In their pleas, the executives depicted a broad conspiracy at the company during the last two years to lie to prosecutors and Computer Associates' own lawyers about the company's past practice of backdating sales to meet Wall Street forecasts for its revenue and profit.

The company is eager to resolve the investigation, and the directors plan to meet with prosecutors later in the week, after the board has decided what, if any, action to take against Mr. Kumar, these three people said.

They said that as many as a dozen other Computer Associates executives could be forced out as the company tries to demonstrate to prosecutors that it is serious about changing its corporate culture. John F. Savarese, a lawyer for Computer Associates, declined yesterday to comment on the company's plans.

See the complete story at the NYT's Website (registration may be required).

This article was compiled and edited by CIO Update staff. Please direct any questions regarding its content to Allen Bernard, Managing Editor.


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