After several years of legal wrangling, civil suits, asset sales and negotiations, Sanjay Kumar, the former CEO of CA, finally will report to jail on Tuesday to begin serving a 12-year sentence for his role in the company’s accounting scandal. Kumar was the head of CA at a time when the company was infamous for high-pressure sales tactics and, as came out in his prosecution as well as other related cases, the practice of sometimes extending months or quarters beyond their closing dates in order to book more revenue. He was convicted of a number of counts of securities fraud, obstruction of justice and making false statements. In addition to his jail term, Kumar was forced to sell of $50 million of his own assets in order to pay restitution and will be on the hook to pay a portion of his future wages once he’s released, as well.
Kumar is only the latest CA exec to head off to prison as a result of the accounting scandal. The company’s former VP of sales, Stephen Richards, is already serving time and a number of other former high-ranking officials have entered guilty pleas, too. The accounting scandal erupted in 2002 and resulted in more than $2 billion in shareholder losses, federal prosecutors said. For a while it looked as though Kumar would come through the investigation unscathed, but he eventually left the company in 2004 and was indicted shortly thereafter. He pleaded guilty and got the 12-year sentence last fall. CA has gone to great lengths to distance itself from the Kumar regime, changing the company’s name from Computer Associates and bringing in an entirely new senior management team. According to a story in Newsday, which has done some of the best reporting on this story since the beginning, Kumar has said he will cooperate with authorities on the ongoing investigations into the scandal.
I interviewed Kumar a couple of times several years ago and the word that kept popping into my head during those conversations was: smooth. And I don’t necessarily mean that in a negative way. He was just one of those execs who was unfailingly polite and polished, no matter what the subject was. He had the ability to turn just about any conversation back to whatever positive message he wanted to get across. He also struck me as someone who always had a plan, and I wouldn’t be surprised to see a second act from him whenever he gets out of prison.