Kumar: Out of the hot seat

New York, April 21 (Agencies): Computer Associates International Inc, which has been under Federal investigation for two years over its accounting practices, on Wednesday said chairman and chief executive officer Sanjay Kumar has stepped down.

Lewis Ranieri, the board’s lead independent director since 2002, was elected chairman. Kumar will remain with the company as chief software architect, a new position.

After running the company for four years, Computer Associates (CA) said Kumar had stepped down from his executive positions and the board of directors.

The board will begin a search for a new CEO immediately and is expected to name an interim CEO shortly.

The US attorney’s office and the Securities and Exchange Commission have been investigating Islandia, New York-based Computer Associates’ past accounting practices, and the company has launched its own probe.

“The changes in Sanjay’s role are not based on the conclusion that he engaged in any wrongdoing,” said Ranieri. “Nonetheless, the conduct in question occurred during his tenure, and the board felt this action was appropriate.”

Four former finance executives have pleaded guilty to fraud or obstruction of justice charges, including Ira Zar, the former chief financial officer.

Zar implicated two other high-ranking executives. Though their names were not disclosed, prosecutors noted that Zar reported to Kumar.

In January, a former senior vice-president who pleaded guilty said CA had a “widespread practice” of inflating revenue by closing the books on a quarter a few days late.

Kumar’s career at CA has traced a dramatic and turbulent arc. Born in Colombo, Sri Lanka, in 1962, Kumar and his family emigrated to the United States when he was 14. He was only 25 when he joined CA.