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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