Forum for Shareholders of CA, Inc.

Forum Home Page

Pending Status

Forum activities relating to CA, Inc. are temporarily suspended pending release of a court-appointed Examiner's report on management compliance with a Deferred Prosecution Agreement.

CA Forum Home Page

CA Research Reference



The New York Times
April 13, 2007

Ex-Executive Agrees to Pay $800 Million in Restitution

Sanjay Kumar, the former chief executive of Computer Associates, has agreed to pay almost $800 million in restitution to investors who lost money because of the company’s accounting fraud.



Louis Lanzano/Associated Press
Sanjay Kumar, former chief executive of Computer Associates.


Mr. Kumar, who is scheduled to begin serving a 12-year prison term this month, will actually pay about $52 million this year, the majority of his and his family’s assets. Most of the remaining restitution will probably never be paid, although when Mr. Kumar leaves prison the government will have the right to garnish 20 percent of his wages.

The agreement was filed last week in Federal District Court in Brooklyn before Judge I. Leo Glasser, who has overseen the long-running case. Mr. Kumar is scheduled to appear today before Judge Glasser.

Mr. Kumar, once a part owner of the New York Islanders and one of the highest-profile executives on Long Island, pleaded guilty last year to a conspiracy to inflate Computer Associates’ sales in 1999 and 2000 and to interfere with the subsequent federal investigation. As part of the conspiracy, Mr. Kumar lied repeatedly to investigators and even authorized paying $3.7 million to buy the silence of a potential witness.

Several other former company executives also pleaded guilty in the scheme, though Charles B. Wang, the founder and longtime chairman of Computer Associates, was never charged. The statute of limitations on securities fraud is five years, making further indictments on fraud charges impossible.

The company, now called CA Inc., makes software that helps companies manage their computer networks and mainframes. At the height of the fraud in 2000, the company claimed it had more than $6 billion in sales. Last year, it reported less than $4 billion in sales.

Former employees have said that during the late 1990s, Computer Associates engaged in many tricks to inflate its sales and profits, including booking sham sales and backdating contracts. As part of his guilty plea, Mr. Kumar admitted backdating contracts, and the indictment and other supporting evidence refer to repeated sham sales.

As part of the restitution agreement, Mr. Kumar will pay about $20 million from his own assets, while trusts he created for his wife and children will pay the remainder. Mr. Kumar’s family will probably be left with several million dollars in assets.

The company has already paid $225 million to the restitution fund. Other senior executives who pleaded guilty in the case will also have to make restitution, although their contributions will be much less than Mr. Kumar’s.

Even so, the fund will be able to repay only a small part of what shareholders in the company — including many employees — lost in the fraud. The company’s stock trades at one-third of its peak in 2000. Yesterday, CA shares closed at $26.36, up 40 cents.

Besides the restitution, Mr. Kumar must pay an $8 million fine that Judge Glasser imposed last year.

Lawyers for Mr. Kumar and a spokesman for federal prosecutors in Brooklyn did not return calls seeking comment.


Copyright 2007 The New York Times Company


The Forum is open to all Computer Associates ("CA") shareholders, whether institutional or individual, and to any fiduciaries or professionals concerned with their investment decisions.  Its purpose is to provide shareholders with access to information and a free exchange of views on issues relating to their evaluations of alternatives, as described in the Forum Summary.

There is no charge for participation.  As stated in the Conditions of Participation, participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

Inquiries and requests to be included in the Forum's distribution list may be addressed to

The material presented on this web site is published by Gary Lutin, as chairman of the Shareholder Forum.