CA board to Sam Wyly: No management ouster

The board of directors at Computer Associates International Inc. has shot down a proposal to oust its chairman and top managers and reaffirmed that CA is growing and healthy, despite image troubles and government investigations into its finances.

This week, the board of the massive Islandia, N.Y.,-based company rebuffed an overture from Dallas-based venture capital fund Ranger Governance Ltd. to remove co-founder and Chairman Charles Wang, President and CEO Sanjay Kumar, and Chief Financial Officer Ira Zar.

Ranger is headed by Texas billionaire Sam Wyly, one of CA's most vociferous and persistent critics. Last month, Ranger issued a letter to shareholders denouncing CA's management and financial practices and urging the board to take "decisive action."

Bringing up a longtime sore point for CA -- customer relations -- the letter also said that CA could never "grow so long as so many potential customers for new products do not trust top management. This distrust of CA by information technology managers has been justly earned by a CA culture created under Sanjay Kumar over the past 14 years and Charles Wang over the past 30 years."

In response, the board at CA, which includes former New York Sen. Alfonse D'Amato, issued a letter dated April 11, with a point-by-point refutation of Ranger's claims. Although the board shared Ranger's concerns about the recent poor performance of CA stock, it went on to say, "We fundamentally disagree with the premises and conclusions in your letter."

On the customer trust issue, the board declared flatly that Ranger was "plainly wrong. ... CA customer satisfaction statistics show significant improvement over the past year, largely due to initiatives led by CA's senior management."

Kumar himself will be presenting those statistics at the upcoming CA World user event in Orlando.

The letter went on to defend CA's accounting and practices -- its new business model in particular -- and declined to meet with Ranger to discuss the proposed managment ouster.

This is the second CA management defeat for Ranger, which just months ago led a bitter and very public campaign to unseat Wang and Kumar in an unsuccessful proxy fight Ranger spokesman Steve Perkins couldn't be reached by deadline for additional comment.

CA has had its own problems, however, including a preliminary government investigation into its financial accounting practices, a recent credit downgrade, as well as a string of unflattering articles from The New York Times.

Users have offered mixed views of Ranger's role as a CA critic.

There is a plus to this sort of activity, according to Sherry Irwin, an IT consultant and chairwoman of the Toronto-based Canadian Software Asset Management Users' Group. "I think such scrutiny and criticism are valuable in increasing vendors' accountability to shareholders and customers, provided [it's] based on fact vs. speculation. This applies not only to CA, but to other vendors who might change their organization [or] practices to avoid being the target of such criticism [or] action."

Not everyone sees it that way. "After so many attempts, it seems to me it [has] become a personal ambition for Sam Wyly to get a victory in his war with CA," said Mike Stevenson, enterprise administrator at the Peel Regional Police data center in Brampton, Ontario, a CA Unicenter management application shop.

At this point, Stevenson said, Wyly's attempt to reform CA has "become a nuisance."

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