Kumar Pays Price for CAs Dismal Integrity

By John Pallatto  |  Posted 2004-06-04 Print this article Print

At last, former Computer Associates CEO Sanjay Kumar has reached the conclusion that his departure is part of the price his company must pay to close the book on its history of accounting improprieties.

Another big shoe dropped in the continuing investigation of accounting irregularities at Computer Associates when former CEO Sanjay Kumar disclosed June 4 that he is leaving the company.

Its another indication that more weighty shoes are likely to come clunking down on Computer Associates International Inc.s headquarters as the investigation continues and federal investigators disclose what sort of litigation, prosecution or sanctions they may bring against the company.

Click here to read about Kumars announcement that he is leaving Computer Associates.
After resigning as chairman and CEO in April, Kumar was invited to stay on as CAs chief software architect, an expression by the companys directors that they didnt hold him personally responsible for the accounting troubles that resulted in the firing of nine employees from CAs finance and legal departments.

It was also an expression of the respect the company had for Kumars influence with customers and shareholders and his contribution to the company.

But this gesture only delayed the inevitable. His decision to leave now is a wise one, but long overdue. CA can never really demonstrate that it has put its long history of accounting improprieties behind it until it severs all connections with the people at the top who actively or tacitly allowed these activities to continue unchecked.

Its another indication that CA is signaling to federal authorities that it is highly motivated to resolve the federal Securities and Exchange Commission investigation of the companys accounting practices.

Kumars sudden decision to leave the company altogether raises questions about what talks may be going behind the scenes between federal investigators and CAs board of directors. Next Page: CA has set aside $10 million for settling potential sanctions.

John Pallatto John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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