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CA nixes request for minutes

Tells investor group that transcripts of its board of directors meetings are off limits because of regulations


August 26, 2005

After indicating it would "amicably" comply with a request by a shareholder group seeking to review minutes of meetings of its board of directors, Computer Associates International Inc. has hit the brakes on the effort, citing securities regulations.

"We're not making them available," Shannon Lapierre, a company spokeswoman, said Wednesday. In calling off cooperation, CA said it was complying with securities regulations that prevent companies from selectively disclosing information to only certain shareholders.

The response didn't sit well with the leader of the shareholder forum.

"CA seems to be either confused or deliberately distorting the securities law," investment banker Gary Lutin said yesterday. "We have asked for information that any shareholder has a right to demand and that CA has an obligation to provide. In fact, we had initiated the suggestions to assure compliance with the securities laws, and their own outside lawyers have executed the suggested agreement."

Governance expert Gregory Taxin, chief executive of the firm Glass, Lewis & Co. in San Francisco, suggested CA's citing of securities laws "may be an excuse for not doing something they'd prefer not to do." Noting that disclosure rules prevent companies from selectively disclosing market-moving information, he said, "It's unclear to me how 1998 board minutes are material information when it comes to valuing CA stock today."

CA, Lutin said, provided about 150 pages of minutes to the shareholder forum, which is attempting to determine how board members responded to signals of accounting fraud beginning in the late 1990s. The forum had sought board minutes up to 2004.

But the 150 pages didn't address the request. "Shareholders have a right to all the minutes," Lutin said.

The request for minutes came in a letter last month from Peter Brennan, a former chairman of the New York Society of Security Analysts' committee for corporate governance.

Brennan, acting as a delegate for shareholder Leonard Rosenthal, a professor of finance at Bentley College in Waltham, Mass., wrote that he sought "to determine specifically how each director conducted his or her oversight responsibilities during the period of acknowledged management misconduct from 1998 to 2004."

The shareholder group said a response from an outside attorney for CA indicated that the company would "amicably" comply with the request.

That changed in a letter sent to Lutin last week in which CA's general counsel, Kenneth Handal, asserted that "such an open-ended obligation of disclosure is not ... in the best interests of CA and its shareholders."

Separately, CA officials met in recent weeks with the son of Walter Haefner, the Swiss billionaire who owns 21 percent of CA stock, an official said Wednesday. It's unclear what they discussed. Top CA officials have also met with Haefner himself during the past year, the official said.


Copyright 2005 Newsday Inc.



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