A big ax fell at Computer Associates International Inc. Wednesday when the company announced that chairman and CEO Sanjay Kumar is out as leader of the management-software company, which is embroiled in a Securities & Exchange Commission investigation.
Kumar, who has led the company since 2000 and has been credited with reshaping the company's internal and external focus, will now serve as chief software architect, a newly created position. Kumar also has resigned from the board. An interim CEO is expected to be announced shortly, while a search for a permanent CEO is conducted.
Lewis Ranieri, who has served as the board's lead independent director since 2002, now is chairman.
This is the latest repercussion of the SEC's investigation into CA accounting practices. A dozen CA employees have been fired or forced to resign as a result. Earlier this month, Ira H. Zar, the company's former chief financial officer, pleaded guilty to fraud and obstruction charges. He has been cooperating with investigators and has said two other senior executives conspired with him in manipulating the company's earning statements.
"I would assume they would want [Zar's] cooperation unless they are going after someone bigger, and who is bigger than Ira?" John DiFucci, an analyst with Bear Stearns, asked rhetorically. DiFucci says obvious targets are Kumar and Charles Wang, who served as CEO prior to Kumar.
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