CA's accounting scandal finally topples ex-CEO Kumar

Posted on 7 Jun 2004 at 14:48

Sanjay Kumar has finally left Computer Associates in the wake of the scandal which has already claimed several board members including the Chief Financial Officer. He will leave the company with immediate effect and will have no further role within it.

The scandal arose when it emerged that CA included revenue booked in one quarter to the previous quarter's results in order that the company met Wall Street's expectations and maintained the share price.

Kumar had stepped down from his position as CEO in April into the post of 'Chief Software Architect' which had been specially created for him. However, the board of Computer Associates which is desperate to settle the matter with the US Security and Exchange Commission felt that Kumar's presence still represented a link with the past. Although there have already been a number of resignations at the board level and in the accounts and legal departments, it was obviously felt that the buck should stop at Mr Kumar.

CA Chairman Lewis Ranieri said, 'The Board is committed to reaching a settlement of the government's investigation into the Company's past accounting practices as quickly as possible. We are working hard to take the remedial steps necessary to put this entire matter behind CA. Sanjay's decision to leave CA was made in that spirit.'

In return Kumar said, 'I believe my decision to leave at this time is the right one. It hopefully will permit CA to move forward.'

Computer Associates will now hope that is has done enough to head off a full federal investigation.

Author: Steve Malone