Setting Cash Aside
The company has already disclosed that it has set up a $10 million reserve to cover potential costs of settling any legal sanctions that federal authorities may impose. Click here to read John Pallattos commentary on CAs decision to set aside $10 million.He denied that his decision to stay would be a distraction from the companys efforts to resolve its legal issues. It could very well be that Kumars departure is part of the price federal authorities are demanding to resolve the investigation. Even with his departure, Kumar is still as much under a cloud as his former employer. The SEC investigation has already resulted in guilty pleas from three former senior CA executives on fraud conspiracy charges. More indictments may still be in the offing. CA seems to be finally waking up to the reality that it has a lot of work to do before its history of fast and loose accounting becomes a fading memory. But to do that, CA will have to demonstrate that its more virtuous than the average corporation in all of its business practices. As respected as he was as the manager who guided CA into new markets and allowed it to make an orderly retreat from mature product lines, Kumar was still closely identified with the arrogant, old regime that led the company into its current troubles. While he may have been content to remain with CA in the role of corporate elder statesman, its clear that any benefit he brought to the company was far outweighed by the dismal record of management integrity that CA compiled without reform during his watch. eWEEK.com Enterprise Applications Center Editor John Pallatto is a veteran journalist in the field of enterprise software and Internet technology. Check out eWEEK.coms Enterprise Applications Center at http://enterpriseapps.eweek.com for the latest news, reviews and analysis about productivity and business solutions.
In the five weeks since stepping down as CEO, Kumar gave every indication that he was looking forward to a lengthy tenure working with customers in his role as chief software architect.