Sanjay Kumar, Computer Associates International
Sanjay Kumar was once the protÃ©gÃ© and right-hand man of Computer
Associates International founder Charles B. Wang. The Sri Lankan native took
over as CEO in 2000, promising to improve accounting and customer relations. But
while customer ties got better, the accounting came under fire. A Justice Dept.
probe of CA's accounting begun nearly three years ago culminated last
September with Kumar, 42, being indicted for securities fraud and obstruction of
justice. He denies the charges.
The government got its big break in the case last January, when a midlevel CA
manager started cooperating with investigators. Then, one after another, more
executives and managers started talking. The government found that at the end of
quarters in fiscal 2000 and 2001, CA executives kept the books open for extra
days so the company could recognize revenues from late-closing deals-boosting
its financial performance. Insiders called it the 35-day month.
Kumar was one of 15 former executives and employees who lost their jobs as a
result of the investigation. Most pleaded guilty to accounting misdeeds and
obstruction of the federal investigation. CA itself avoided prosecution by
agreeing to being monitored and paying $225 million into a fund for
shareholders. Kumar awaits trial this year.
Craig Conway, PeopleSoft
When a board of directors decides to dump a chief executive officer,
they usually try to sugarcoat the firing so investors don't hit the panic
button. But when the board of software maker PeopleSoft gave the boot to CEO
Craig Conway on Oct. 1, it didn't pull any punches, saying it had "lost
confidence" in Conway's leadership. Later, in press interviews and court
testimony, PeopleSoft board members said they were worried that Conway had
misled investors about the impact of a hostile takeover bid by rival Oracle
Corp. Conway hasn't publicly commented on what happened. But it's an
ignominious way to end his five-year run.
The 49-year-old CEO engineered a dramatic turnaround at the company and drove
it to record sales. But a merger last year with J.D. Edwards hasn't gone as
well as many hoped. Meanwhile, the 18 months the company spent fending off a
hostile takeover bid by rival Oracle were taking a toll on its sales and on
Conway's relations with investors, many of whom worried that his fight with
Oracle CEO Lawrence J Ellison, his former boss, had become way too personal.
Don't weep for Conway, though. He received an exit package worth an
estimated $3.2 million. With Conway out of the way, Oracle and PeopleSoft
finally agreed on a $10 billion deal in the early hours of Dec. 13. It's
expected to close as early as January.
In Dallas in BusinessWeek. Copyright 2005 by The McGrraw-Hill Companies,