Sanjay Kumar has resigned as chairman and chief executive officer of embattled software giant Computer Associates International Inc. He also resigned from the board of directors.
Kumar has, however, been named to the new position of chief software architect.
Lewis Ranieri, who has served as the board’s lead independent director since 2002, has been elected chairman. Ranieri, a former Salomon mortgage-bond trader who was immortalized in the 1980s best-selling book Liar’s Poker, is the founder of hedge funds Hyperion Partners L.P. and Hyperion Partners II L.P.
The company’s board will begin a search for a new chief executive immediately and is expected to name an interim CEO shortly, according to Reuters.
“We believe the decisions we have made today are fair and responsive to the situation and in the best interests of CA’s customers, shareholders and employees,” said Ranieri, in a statement. “The changes in Sanjay’s role are not based on the conclusion that he engaged in any wrongdoing. Nonetheless, the conduct in question occurred during his tenure, and the board felt this action was appropriate.”
The Islandia, New York-based company is being investigated by the U.S. Attorney’s Office for the Eastern District of New York and by the Securities and Exchange Commission for its past accounting practices.
Computer Associates’ audit committee found that as recently as fiscal 2000, the company recognized revenue prematurely for contracts that were signed in a later quarter. At the time of that disclosure, in October 2003, the company’s chief financial officer and two other finance executives resigned. Earlier this week the company fired more nine employees.
According to Newsday, lawyers for Computer Associates were expected to meet with federal prosecutors as early as Wednesday to argue against a corporate indictment of the company and discuss a possible civil settlement.