Kumar resigns from Computer Associates

Anne Saita

Despite vows to stick with the company he ran until a recent demotion, former Computer Associates CEO and chairman Sanjay Kumar resigned Friday. The decision, he said in

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a statement, was to help the Islandia, N.Y.-based company move forward during ongoing federal probes into accounting practices done while he was president of the company.

"I understood that my stepping down as chairman and CEO represented a break with the past," Kumar, 42, said. "But I have reluctantly concluded that as long as I hold any position, focus on past issues and my current role will continue."

In April, the software giant's board of directors removed Kumar as CEO and chairman in the wake of Securities and Exchange Commission and U.S. Department of Justice investigations into how the company handled past bookkeeping of sales that led to inflated stock value. At the time of the questionable practices, Kumar was president of the company. The inquiries already have led to three former CA executives, including its former CFO, pleading guilty to criminal charges tied to illegal business practices. Kumar has not been charged with any wrongdoing.

Rather than fire Kumar, the board established a new chief software architect position for the longtime employee and named former Vivendi Universal Games CEO Kenneth Cron as interim CEO and Hyperion investment group founder Lewis Rainiri its new chairman.

I have reluctantly concluded that as long as I hold any position, focus on past issues and my current role will continue.
Sanjay Kumar,

One of Kumar's main goals as CEO was to improve customer service and better market the company's vast software offerings, including a wide library of security products. CA has tried to gain market share in both established and nascent security markets by aggressively marketing itself as a security software leader. Its most recent announcements involving enhanced vulnerability assessment services came during last month's annual CA World conference, in which Kumar also vowed to stick with CA despite all the recent turmoil. On Friday, he conceded his continuation with the company created too much distraction.

Kumar came to CA through an acquisition in 1987 and quickly moved up the ranks to eventually become CEO in 2000 and chairman in 2002. His tenure at the top had been rife with conflicts, particularly between investors, some of whom had tried unsuccessfully to overturn the board. Last summer Kumar announced the company had settled all outstanding investor lawsuits. He also continued to push CA's 16,000 employees worldwide to focus more attention on customer service as a way to regain support for the billion-dollar company and its products and services.

"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 said Friday. "It hopefully will permit CA to move forward."

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