CA
Inc.'s Shareholders Say Ex-Chief Should Pay Software Maker
By Patricia Hurtado and Ron Day
Jan. 17 (Bloomberg) -- CA Inc.
shareholders asked a judge to turn over money from the
sale of their former chief executive officer's two
Ferraris, Long Island mansion and other assets to the
company following his sentencing for a $2.2 billion fraud.
Careal Holding AG and Private Capital
Management LP, CA's two largest shareholders, have written
to U.S. District Court Judge I. Leo Glasser requesting he
force ex-CEO Sanjay Kumar to pay restitution. Kumar was
sentenced in November to 12 years in prison after pleading
guilty to accounting fraud.
The request follows a similar demand
from CA that Kumar and Stephen Richards, the company's
former chief of sales, repay the Islandia, New York-based
company, the second-largest maker of software for
mainframe computers. Other shareholders have filed suit
asking that the restitution be paid to investors instead.
``Mr. Kumar is responsible for
inflicting hundreds of millions of dollars of harm on CA,
maybe even billions,'' Careal Chairman Martin Haefner
wrote in a letter to the court filed late yesterday.
Paying CA directly is ``the best and most appropriate way
to provide restitution to uncompensated shareholders.''
In November, CA won a state court order
attaching Kumar's home, cars, boat and bank accounts as
part of a suit to recover $14.9 million that the software
company spent defending him against fraud charges.
According to court documents, Kumar's
holdings include his home in Upper Brookville, New York,
two Ferrari 550 Maranellos, a 57-foot yacht and $9 million
that CA founder Charles Wang is reportedly paying for
Kumar's interest in the New York Islanders hockey team.
`Ill-Gotten Gains'
``CA is actively working to recoup any
ill-gotten gains,'' CA spokeswoman Jennifer Hallahan said.
``Our commitment has not wavered on this issue: We want
the money returned.''
Assistant Brooklyn U.S. Attorney Eric
Komitee, who is prosecuting the case, also asked Glasser
to prohibit Kumar, 44, from transferring assets from the
sale of any of this property to CA before the judge can
order any funds be forfeited.
Glasser hasn't ruled on Komitee's
request and scheduled a hearing on the restitution issue
for later today.
Kumar's lawyer Jack Cooney has argued
against Glasser imposing such an order. There's no risk
that Kumar will transfer the assets before Glasser rules,
Cooney said.
Kumar's lawyer for the restitution
matter, Lawrence McMichael, wasn't immediately available
for comment. Komitee also wasn't immediately available for
comment.
The case is U.S. v. Kumar, 04-CR-846,
U.S. District Court, Eastern District of New York
(Brooklyn).
To contact the reporter on this story:
Patricia Hurtado in Federal Court in Brooklyn at
pathurtado@bloomberg.net ; Ron Day in New York
at
rday1@bloomberg.net
Last Updated: January 17, 2007 16:03
EST
