The Fallen Managers

DQI Bureau
New Update

Sanjay Kumar, Computer Associates International

Sanjay Kumar was once the protégé 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,