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Kumar Exits Computer Associates

Sanjay Kumar, the embattled former CEO of Computer Associates International , has left the company following intense scrutiny by federal regulators and investors.

Kumar, who was forced to resign as CEO to take on the lesser role of chief software architect in April, "will cease all involvement with the Company's business effective immediately" according to a statement from the Islandia, N.Y.-based software maker.

Kumar hinted in the statement that regardless of his reduced role, the difficulties of the ongoing investigations remain.

"It has become increasingly clear to me in the past few days that my continued role at CA is not helping the Company's efforts to move forward," said Kumar, who became CA's CEO in 2000. "I understood that my stepping down as chairman and CEO represented a break with the past, but I have reluctantly concluded that as long as I hold any position, focus on past issues and my current role will continue.

The departure marks some closure for the provider of management software for data centers, which had run afoul of the Securities and Exchange Commission over the last few years for questionable accounting.

Specifically, the SEC believes the company inflated its revenue picture after investors charged that CA renewed contracts before their terms ended in exchange for larger payments up front, leading the public to believe that CA had closed more deals and incurred more revenue than it really had.

Investigations by the U.S. Attorney's Office and SEC are ongoing and may result in administrative, civil or criminal proceedings against the company.

CA, considered a leader in the management software space for such niches as Web services, is hoping to put the past behind it. The company is coming off a successful CA World 2004 show in Las Vegas, which ZapThink analyst Ronald Schmelzer called a success, with 15,000 attending.

Along with rivals IBM and HP , CA is trying to stake its claim in the market for software to bring on-demand dynamics to data centers.

Kumar's removal and replacement in April by interim CEO Kenneth Cron came shortly after the firing of nine members of the vendor's finance (5) and legal (4) departments as the company hopes to purge the taint of shaky finances.

"The Board is committed to reaching a settlement of the government's investigation into the Company's past accounting practices as quickly as possible," said CA Chairman Lewis Ranieri in a statement. "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."



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