Wang Retires From CA, Kumar At the Helm
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Charles Wang, the founder and Chairman of Computer Associates, has resigned, effective immediately. Wang had stepped away from the day-to-day running of the business for months, and CA CEO Sanjay Kumar, 40, replaces him, as the company's new chairman.
Wang's departure comes as Computer Associates recently posted better than expected financial results, while the investigations by the Justice Department and Securities and Exchange Commission hang over it.
Kumar now leads the maker of software for mainframe and networked computer systems, which in October posted a smaller than expected second quarter net loss, but analysts remain reserved in their ratings of the software giant.
CA has seen its revenues drop sharply, along with others in the software sector, because of the prolonged corporate technology spending recession. CA has several upcoming debt payments, as it moves to pay down more than $1.3 billion in debt over the next few months. If CA faces a shortfall of several hundred million dollars, it may have to turn to a $1 billion line of revolving credit.
Wang, 58, was given the honorary position of chairman emeritus of the company he help found with three associates in New York City in 1976. Wang's departure, comes at a time of severe scrutiny by Justice and SEC of its accounting practices, and much earlier than some expected.
"I am pleased to have completed the transition of leadership to Sanjay, who has been a trusted colleague and valuable partner, in a smooth and orderly way," Wang said in a statement.
Analysts said the announcement was not expected, but also not entirely surprising. In addition to Wang stepping down as chairman, he is also retiring from the company's board. But a CA spokesman said Wang's retirement was in no way related to the federal investigations of its retirement practices.
Computer Associates, based in Islandia is one of the biggest companies on Long Island, and the country's fifth largest software maker with more than 16,000 employees. Wang and Kumar remain co-owners of the New York Islanders NHL hockey franchise.