CA board finds no accounting irregularities

By SiliconIndia   |   Thursday, 26 September 2002, 07:00 Hrs
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NEW YORK: Sanjay Kumar, chief executive of Computer Associates International Inc., Wednesday said a board-ordered investigation of the Islandia, N.Y., software company's past accounting found no irregularities.

Kumar told a group of institutional investors that his "goal is to make Computer Associates the 'gold standard' in corporate governance. That is a personal commitment and one that I intend to keep."

Kumar also defended his decision to pay $10 million to end a proxy contest earlier this year. He said the review was conducted by PricewaterhouseCoopers under the direction of Computer Associates board member Walter Schuetze.

Speaking at the Council of Institutional Investors' Fall Conference in New York City, Kumar said, "Achieving the highest possible standards of good corporate governance begins with my commitment, and it is propelled by the time and energy invested by the extraordinary, independent directors who have come together to serve on our Board today."

"The ultimate goal of good corporate governance is not simply to follow the most stringent rules," said Kumar.

He was quoted by a news agency that PwC had found no accounting irregularities or violations of generally accepted accounting principles.

The review covered the third and fourth quarters of the company's 1998 fiscal year. Critics contend the company inflated its financial results during that period to lift its stock price and trigger a $1 billion stock grant to Computer Associates' top three executives, including Kumar. The executives, who were sued by shareholders, later agreed to return some of the shares.

Kumar said the company was working toward improving its corporate governance practices, including naming a lead independent director, expensing stock options and instituting director term limits.

He said he believed his actions were in the best interests of shareholders. Among the reasons he cited were moves by Wyly in June to contact a number of large customers, prompting worries that the customers would hold up orders and cause Computer Associates to have a shortfall in fourth-quarter earnings. "I believe what he was going to do this year was a distraction," Kumar said.

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