19 April 2004 Computer Associate’s board will meet as early as tomorrow to decide the fate of CEO Sanjay Kumar, as the long-running probe into the software company’s accounting practices reaches its final stages.
In addition, up to a dozen other CA executives may be forced out as the company tries to demonstrate that, after years of allegations of accounting fraud and obstruction of justice, its aggressive corporate culture is changing.
Kumar has become the focus of allegations that go back to the late 1990’s and 2000 when he was second in command, after founder Charles Wang. Despite this, his lawyers say that he has done nothing wrong and that he expects to be exonerated.
The investigation has intensified in recent weeks after three former top executives, including the company’s former chief financial officer Ira Zar, pleaded guilty to charges of obstruction and securities fraud.
The admissions add weight to the allegations that CA backdated sales to meet Wall Street revenue and profit estimates: running so-called ’35 day months’ at the end of the quarter to make its numbers. In its 2000 fiscal year, the company backdated more than $1 billion in sales.