New York (April 26, 2004) -- Kenneth Cron, former chief executive of Vivendi Universal SA's games division, has reportedly agreed to become interim CEO of troubled software maker Computer Associates International Inc., according to published reports.
Cron became a CA director in 2002. He left Vivendi Universal Games in January 2004, reportedly after he failed to find a buyer for the games unit. Previously, he served as CEO of Uproar Inc. until it was acquired by Flipside in March 2001. He then served as CEO at Flipside, a division of VUG. Prior to that, he was the president of publishing at CMP Media, where he was responsible for the company's U.S. businesses, including its print publications, trade shows/conferences and online services.
If he accepts, Cron, 47, would temporarily replace chairman and CEO Sanjay Kumar, who resigned last week under pressure amid ongoing investigations into an accounting scandal at the firm by both the U.S. Attorney's Office and the Securities and Exchange Commission.
Kumar, who stayed on as chief software architect, has not been charged with any wrongdoing in the accounting probe. The firm has already named Hyperion Partners founder Lewis Ranieri, who has served as the CA board's lead independent director since 2002, as chairman. CA said it expects to begin the hunt for a permanent successor for Kumar shortly.
In a statement last week, Ranieri said the changes in Kumar's role were "not based on the conclusion that he engaged in any wrongdoing. Nonetheless, the conduct in question occurred during his tenure, and the board felt this action was appropriate."
Earlier last week, CA fired nine other employees in its legal and finance departments as a result of issues raised during an investigation by the board's audit committee into the company's accounting practices.
The firm's accounting troubles stem from the premature recognition of revenue from software license contracts back in 2000. Earlier this month, three former CA employees, including former chief financial officer Ira Zar, pled guilty to federal charges, including conspiracy to obstruct justice and conspiracy to commit securities fraud. The trio also settled civil fraud charges with the SEC.
The firm's audit committee, headed by former SEC chief accountant Walter P. Schuetze, said it's close to completing its investigation and its assessment of whether the firm will need to restate prior financials.
-- WebCPA staff
