CA, Partners Move On As Kumar Faces Charges

CA partners were shocked by the indictment of Kumar, a high-profile, charismatic leader who left CA in June amid the investigation. Kumar is being made a scapegoat, many partners said.

"This is a witch hunt," said Ed Paine, vice president of DataTech Enterprises, a CA solution provider in Fredericksburg, Va. He said Kumar's indictment exposes the problem with post-Enron prosecution in the new age of corporate governance. "You have no rules in place for years, then decide to change the rules. Accountability is one thing, but it's wrong to try and throw these people in jail for 20 years."

Drew Sellers, president of SSG Consulting, Cleveland, said, "Five years ago, [a Kumar indictment] would not have happened. I think it seems odd that they would settle with the company [and] then indict Kumar. But it just sends a message that you can no longer hide behind the corporate veil."

Solution providers agreed that settling the investigation will mean less anxiety in the channel as the Islandia, N.Y.-based company moves forward.

Sponsored post
CA's Troubled Past >> FEBRUARY 2002: First reports of joint investigation by SEC and Justice Department.
>> OCTOBER 2003: CFO Ira Zar, Finance SVP Lloyd Silverstein and VP David Rivard resign.
>> APRIL 2004: Zar, Rivard and Finance VP David Kaplan plead guilty to fraud.
>> APRIL: Kumar steps down but remains at CA.
>> MAY: Cron named interim CEO of company.
>> JUNE: Kumar resigns, severing all ties to CA.
>> SEPTEMBER: CA settles; Kumar indicted.

Several solution providers said it would become much easier now to consider partnering with the software vendor.

Mike Anderson, vice president of business development at InfoSpectrum Consulting, Wheaton, Ill., said, "We're on the verge of entering a limited partnership with CA, and I can absolutely breathe easier now."

Still, the affair is a "huge black eye for CA," said Bob Schuster, president of Networks of Florida, a CA partner in Pensacola, Fla. "But let's be careful. An indictment is not a conviction. It is troubling to see this happen at the highest level of a corporation. But great businesses apply ethics, and I tend to believe the current management at CA is doing a superb job."

CA Interim CEO Ken Cron said the settlement represented a new day for CA. "We are a much more different company than we were a year ago. Change will continue at CA. I guarantee that."

Kumar and former head of worldwide sales Stephen Richards last Thursday each pled not guilty to charges of securities fraud, conspiracy and obstruction of justice. The indictments allege the two men were involved in illegally inflating CA's revenue numbers between Jan. 1, 1998, and Sept. 30, 2000.

CA itself could be off the hook in 18 months if it meets settlement terms, which includes a $225 million restitution to its shareholders. The company has admitted wrongdoing in the case.