Kumar Quits CA

Sanjay Kumar has left Computer Associates International.

June 4, 2004

4 Min Read
Network Computing logo

Sanjay Kumar has left Computer Associates International.

In a statement issued Friday, CA said Kumar--its former chairman, CEO and chief software architect--will "cease all involvement with the company's business, effective immediately."

Less than two weeks ago, Kumar told reporters at the CA World partner symposium that he would continue to play an active role at CA by engaging with customers and assisting in the the company's evolution. But the distraction created by an ongoing federal investigation into CA's past accounting practices apparently outweighed Kumar's ambition to continue at the Islandia, N.Y.-based software company.

"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," Kumar said in a statement. "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.

"While I am grateful for the support and encouragement I have received from customers, employees and shareholders, I believe my decision to leave at this time is the right one," Kumar continued. "It hopefully will permit CA to move forward."Kumar resigned as CA chairman and CEO on April 21 under mounting pressure from the federal investigation.

In accepting Kumar's decision to depart the company, CA Chairman Lewis Ranieri said in a statement, "The board wishes Sanjay and his family well. The board is committed to reaching a settlement of the government's investigation into the company's past accounting practices as quickly as possible. 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."

CA also released a statement saying that the federal probes are ongoing and that the timetable and results of the investigations remain unclear at this point.

"The U.S. Attorney's Office and SEC investigations are continuing, and the company cannot predict the scope, outcome or timing of those investigations, which may include the institution of administrative, civil injunctive or criminal proceedings against the company and/or other company officers or employees, the imposition of fines and penalties, suspensions or debarments from government contracting, and/or other remedies and sanctions," CA said in the statement. "The company also cannot predict what impact, if any, the investigation may have on its results of operations or financial condition, its ability to retain and attract key employees, its credit ratings and ability to finance operations, and its ability to market its products and services."

CA appointed former board member Ken Cron to the position of interim CEO on April 26. That same day, CA announced that its top sales executive, Stephen Richards, had resigned; the company also named Jeff Clarke, a former key Hewlett-Packard top executive who had recently joined CA, as COO. Greg Corgan, who joined CA in 2003 as senior vice president of North American Sales, was named to replace Richards. Corgan, who will report to Clarke, has been named senior vice president for worldwide sales.Three former CA executives, including former CFO Ira Zar, recently entered guilty pleas as part of cooperative agreements with federal prosecutors in their investigation.

On the channel front, several CA partners said Kumar's move made sense, given the wave of corporate scandals in recent years.

"Look at Enron and these other firms mired in accounting problems. [CA] had to shed Kumar for the company to play the Phoenix role," said Sanford Cohn, general manager of the Atec Group, a CA partner in Albany, N.Y.

Steve Pazol, CEO of Nphase, a Chicago-based CA partner, said, "The reason Kumar took the internal position as [chief software architect] was to give the board time to figure out what to do. CA is in damage-control mode and trying to minimize the pain to investors."

Still, other solution providers expressed surprise that Kumar completely severed ties with the company. "Wow," said Ellie Nazemoff, CEO of DataTech Enterprises, a CA partner in Fredericksburg, Va. "When he lost the first position, I knew that [unlike other executives] he would stay on because he loved CA so much. He wanted things to go smoothly."Kumar was unfairly blamed for many of CA's very public woes, Nazemoff added. "When you are in that position of CEO ... it's not necessary that you have to know everything everybody does and get blamed for everything," she said. "Generally, you hire the best people you know, [you delegate] and if they do something wrong, it's not necessarily [the CEO's] fault." Nazemoff credited Kumar with smoothing over CA's partner relationships in the past three years and said he made the company much more partner-friendly. "I will miss him, and I wish him well," she said.

Yet Lew Blanck, an "infogineer" at Blanck Space, a system builder in Reading, Pa., shrugged off Kumar's departure. "My experience in dealing with CA has been steady and on course," Blanck said. "The products are still being nicely supported, and I don't find any vibe going on from the CA people that's like 'Geez, I hope we're still here tomorrow.' And, to tell you the truth, nobody [from CA] even mentioned it."

MARIE LINGBLOM and BARBARA DARROW contributed to this story.

Stay informed! Sign up to get expert advice and insight delivered direct to your inbox

You May Also Like

More Insights