http://www.nypost.com/business/19270.htmCA DELIVERS CEO KUMAR'S HEAD TO REGULATORS
By STEPHEN LYNCH and KATI CORNELL SMITH
April 22, 2004 -- Computer Associates demoted its CEO Sanjay Kumar and met with federal prosecutors yesterday, trying to convince the government not to press charges against the Long Island software maker. In a meeting with the Justice Department and the Securities and Exchange Commission, Computer Associates lawyers revealed the results of an internal audit and argued that the company has installed new safeguards since employees committed accounting fraud, a law enforcement official said.
Meanwhile, Kumar resigned as chairman and chief executive, taking a new position as chief software architect. He was replaced as chairman by Lewis Ranieri, the Long Island software maker's lead outside director. The company said it is looking for a new CEO.
"The changes in Sanjay's role are not based on the conclusion that he engaged in any wrongdoing," Ranieri said in a statement. "Nonetheless, the conduct in question occurred during his tenure, and the board felt this action was appropriate."
The company wouldn't comment on whether Kumar will keep his $1 million annual salary. Computer Associates has moved to disassociate itself from the accounting scandals of 2000, when the company prematurely recognized $1.4 billion in revenue to hit quarterly targets, according to the SEC. The company on Monday fired nine employees in the legal and financial departments; it had previously ousted its general counsel.
Earlier this month, three executives pleaded guilty to charges related to the fraud, including Ira Zar, the former chief financial officer. According to court documents, Zar will implicate two unnamed executives in his testimony. A law enforcement official said those two executives would be Kumar and Stephen Richards, the executive vice president for sales.
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