CA Turns Against Its Founder
Imagine if Microsoft turned against Bill Gates or Oracle turned against Larry Ellison. That’s the scenario unfolding on Long Island this weekend, as CA Inc. (formerly Computer Associates) alleges its founder and former chairman Charles Wang took part in accounting fraud at the company.
Until now, Wang’s former right-hand man–former CA CEO Sanjay Kumar–had taken most of the heat for the accounting scandal from earlier this decade. But CA finally appears ready to play hardball with Wang, who is no longer associated with the company.
Talk about strange timing. The VAR Guy was on the phone with CA representatives on April 13, discussing a completely different subject. During the quick chat, The VAR Guy noted that CA had been unusually quiet in recent months. No big executive departures (unlike the revolving door of 2006). No shareholder battles. Just lots of planning for the April 22 CA World conference in Las Vegas. Finally, CA was focused on customers instead of controversy.
And then all this news breaks later in the day. First, Kumar agreed to pay nearly $800 million over his lifetime to victims of the accounting fraud. Then a special committee on CA’s board also pointed a finger of blame at Wang. Fortunately, neither event should imact CA’s customer focus since CA itself isn’t on the hot seat.
Long Island’s daily newspaper, Newsday, has followed Kumar’s legal troubles closely. But the newspaper rarely, if ever, speculated about Wang’s possible involvement in accounting problems that plagued CA. Wang left the company in 2002, and Kumar was later found to have cooked CA’s books.
But were there two cooks in the kitchen? Wang says no way.
Ironically, all this controversy could be exactly what CA needs as it prepares for CA World. Fortune Magazine in 2006 called CA the most dysfunctional company in America. Current CA management has a chance to prove that change truly is under way.