Software
CA Says Founder Wang Behind Fraud
TSC Staff
04/14/07 - 03:57 PM EDT
A special committee of the board of CA(CA Quote) reportedly says Charles Wang, the companys founder and former chairman and CEO, was responsible for the mammoth accounting fraud that has bedeviled the software company and its shares.
The special committee also recommended legal action against Wang, who it contends "directed and participated" in fraud that forced the company to restate $2.2 billion in sales, according to Reuters.
The special committee released its report on its investigation into the fraud Friday.
But Wang, who owns the New York Islanders hockey team, issued a statement disputing the reports findings, Reuters reported.
"I find it hard to understand how the Special Litigation Committee could believe the information they were given was credible, when their sources are those who perpetrated the crimes at issue and then lied about them to both internal company investigators and the government," Wang said in the statement, according to Reuters.
The scandal at CA has already led to guilty pleas from several other former company executives, including Sanjay Kumar, who replaced Wang as CEO in 2000 and chairman in 2002. Kumar was sentenced to 12 years in prison last November for his role in the scandal.
The CA special committee also announced in its report that it had reached an agreement with Kumar where he will pay the company $15.25 million. This is in addition to $52 million that he must pay to CAs shareholders as part of his his criminal restitution proceedings. A federal judge approved the payment to shareholders Friday, according to AP.
CA shares finished Friday down 1 cent at $26.35.