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CAs Sanjay Kumar Steps Down
si Team
Tuesday, July 8, 2008
Sanjay Kumar, who has led Computer Associates since 2000 and has been credited with reshaping the company’s internal and external focus, resigned as the resigned as chairman and chief executive officer, under the pressure of a long-running criminal investigation into the software maker’s accounting practices. Kumar, who has been credited for the introduction of a new business model that made CA’s revenue and earnings more predictable, will now serve as chief software architect, a newly created position.

The U.S. Attorney’s Office and the Securities and Exchange Commission have been investigating the Islandia, New York-based Computer Associates’ past accounting practices for two years. At least 14 CA employees have been fired or forced to resign as a result, while Kumar has always maintained his innocence. Earlier this month, Ira H. Zar, the company’s former chief financial officer, pleaded guilty to fraud and obstruction charges. He has told the investigators that two other senior executives conspired with him in manipulating the company’s earning statements. His obvious targets: Sanjay Kumar and Charles Wang, who served as CEO prior to Kumar.

An internal investigation found that CA, whose software is used to secure and manage computer networks, had booked some sales too early in its financial year ending in March 2000. The company’s $6.1b in revenue in fiscal 2000 appeared to meet analysts’ forecasts. It included about $1b in prematurely recognized sales from at least 95 contracts. For now Kumar’s new title—chief software architect is the same held by Bill Gates, founder of Microsoft Corp., the world’s largest software maker.
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