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


For copies of the records addressed in the article below, submitted to the United States District Court for the Eastern District of New York in relation to Barroway v. Computer Associates International, Inc., et al, 98-cv-4839, 02-cv-1226; Federman et al v. Artzt et al, 03-cv-4199; Computer Associates International, Inc., Derivative Litigation, 04-cv-2697; and Sam Wyly & Ranger Governance, Ltd. v. CA, Inc. & Sterling Software, Inc., 05-cv-4430, see

For previous reports concerning payments by Charles Wang's Smile Train to Alphonse D'Amato's Park Strategies, as addressed in pages 17-19 of the Kumar Declaration and its referenced Exhibit G tax records (above), see

For a copy of the minutes of the 2003 board meeting referenced in the Kumar Declaration's statements on pages 22-24 about Mr. D'Amato's control of the company's response to government prosecutors, see


Wall Street Journal, September 4, 2008 article


The Wall Street Journal

September 4, 2008


Jailed Ex-CEO Kumar
Implicates Others in Cover-Up

September 4, 2008; Page B9

Sanjay Kumar, the incarcerated former chief executive of Computer Associates International Inc., claims that several current and former directors were aware of the company's fraudulent accounting practices and helped hide the information from government investigators.

Mr. Kumar made the allegations in an affidavit obtained by lawyers for shareholders who are suing over the improper accounting. None of the officials, including a former U.S. Senator who remains a company director, have been charged with wrongdoing, and all denied the allegations.

Computer Associates, based in Islandia, N.Y., was embroiled in one of the largest accounting scandals of the past decade, eventually admitting to some $2.2 billion in misstated revenue.

In 2004, the company, now called CA Inc., paid $225 million into a government-ordered restitution fund for shareholders. Since then, eight former CA officials, including Mr. Kumar, pleaded guilty to federal charges related to CA's accounting. Mr. Kumar is serving a 12-year term in federal prison in New Jersey.

Mr. Kumar's sworn statement, filed Aug. 27 in U.S. District Court in Brooklyn, claims that Lewis Ranieri, a former Salomon Brothers vice chairman who served as CA's board chairman until he resigned last year, had been aware of the practices as early as 2003 and "took steps to conceal the facts" from investigators.

The statement says that Mr. Ranieri instructed Mr. Kumar in 2003 not to disclose to the new chair of the board's audit committee past accounting practices because he "would have a heart attack."

Mr. Kumar also alleges that Alfonse D'Amato, a former U.S. Senator, who has been a director since 1999, was aware of the practices and hid them.

In the statement, Mr. Kumar says that Mr. D'Amato instructed him to be careful to avoid implicating company founder Charles Wang in any of the accounting issues. Mr. Kumar says that, from 1999 through 2003, Mr. Wang directed payments of $390,000 from Smile Train, a charity he founded to repair cleft palates, to Mr. D'Amato's consulting company, Park Strategies LLP. Mr. Kumar says the payments were designed to replace fees that Mr. D'Amato's consulting firm had received before he became a director. The company would have had to disclose such fees in securities filings.

A spokesman for Messrs. Ranieri and D'Amato said Mr. Kumar "from jail continues to be a stranger to the truth."

Mr. Kumar's affidavit also says that Russell Artzt, a co-founder of the company, former director and current vice chairman, had been aware of the accounting practices and urged Mr. Kumar to keep quite about them in front of investigators because he expected Mr. D'Amato would "get this fixed." Mr. Artzt, in a statement, said it was "completely false" that he was aware of the accounting issues.

Mr. Kumar reiterates claims he had previously made that Mr. Wang "personally directed" Mr. Kumar and other CA executives to extend the closing of the company's quarterly accounts for five days or more in order to get time to bring in additional contracts and meet Wall Street earnings expectations. Prosecutors called these extensions "35-day months."

Mr. Kumar, who pleaded guilty to accounting fraud and obstruction charges in 2006, had given testimony about Mr. Wang to a committee formed by CA to investigate internal wrongdoing. Following that report, CA accused Mr. Wang of participating in fraudulent accounting during the 1980s and 1990s. The company said it would try to recover damages from Mr. Wang.

On Wednesday, a spokesman for Mr. Wang said the CA founder stood behind a previous statement, pledging to "vigorously defend my good name and fight any and all efforts to place the crimes of Kumar and his management team at my feet."

Lawyers for investor Sam Wyly, who acquired stock in CA in 2000, obtained Mr. Kumar's affidavit in connection with lawsuits on behalf of CA shareholders.

William A. Brewer, a lawyer with Bickel & Brewer who represents Mr. Wyly, said he hoped the new information would persuade U.S. District Court Judge Thomas Platt to reopen a previously settled class-action case and expedite the handling of two other suits.

In response to questions from The Wall Street Journal, CA put out a statement that said a directors' committee investigated the accounting matters, interviewing 90 employees and outside advisers, and directed the company to seek damages from Messrs. Wang and Kumar. The investigation concluded that other directors weren't liable. "In a matter of this complexity, one cannot draw conclusions from the uncorroborated recollections of a single individual," the company said.

Write to William M. Bulkeley at bill.bulkeley@wsj.com1

  URL for this article:

  Hyperlinks in this Article:


Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved




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.