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By Chris Gonsalves  |  Posted 2004-10-18 Print this article Print

CA officials said they want to recover money from ousted executives as well but are depending on their alliance with federal prosecutors to accomplish that. "CA believes the government is in the best position to obtain disgorgement from wrongdoers," said a CA spokesperson. "We will provide the government with active assistance, including accounting and legal support."

While CA officials had not received Rangers request by press time, the spokesperson said the company is satisfied with the restitution delivered in that case, adding that the settlement would legally be difficult to reopen and revisit.

Wyly led a high-profile proxy battle to oust a majority of the CA board in 2001, claiming, among other things, that the board had negligently overlooked bookkeeping irregularities and a culture of dishonesty at the software maker. It was Wylys proxy fight that first brought suspicions about CAs accounting practices to public attention.

With CA now admitting to the transgressions it dismissed during the proxy battle, Brewer said Wyly and Ranger feel compelled to continue the effort to clean up CA.

"Wyly was at the front edge of this fight and was more right than he knew in 2001," said Brewer.

A Securities and Exchange Commission investigation, concluded last month, resulted in a deferred prosecution deal between CA and the federal government. CA agreed to help with the prosecution of Kumar and sales executive Stephen Richards. CA also agreed to establish a $225 million restitution fund for current and former shareholders and to be monitored by an independent examiner for the next 18 months.

Going forward, Ranger is still seeking an overhaul of the companys management. "They need people on the board who understand this business," said Brewer. "It is best if you have a CEO that runs the company and a [separate] chairman that runs the oversight. One area where both Ranger and CA agree is in the need to move beyond the governance issues and get back to serving customers weary of the internal turmoil. Having just two years of experience with CA, Nick Aldinger, LAN consultant and IT support technician for the Idaho State Controllers Office in Boise, said Cron can ill-afford any more missteps or customers could walk away. "I think this is a wake up call and [Cron] has some big shoes to fill and hopefully he understands the mistakes [former CA executives] made and he doesnt make the same mistake twice," Aldinger said. "That would be devastating and wed have to start looking at other options," to replace CA software products. "Sam [Wyly] would like nothing better to see this company growing," said Brewer. "If you spend all this energy working with core products and with customers rather than spin and pumping up the numbers, this company has phenomenal prospects. Wyly is beside himself that opportunities are being lost." Editors Note: This story was updated to include further comments from officials and sources. Check out eWEEK.coms Enterprise Applications Center for the latest news, reviews and analysis about productivity and business solutions.

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