Monday Grok: Former Cheyenne CEO's tragic end

... and Charles Wang

Reijane Huai committed suicide two weeks ago outside his home in Long Island. That was one day before the former 2009 Ernst & Young Entrepreneur of the Year was going to plead guilty to charges relating to a bribe he paid to an employee of JPMorgan Chase to secure contracts from the company. Those allegations had already forced him out of FalconStor, the company he founded in March 2000.

No wonder Americans have so little faith in their institutions.

Those Australians who remember Huai, probably do so because he was the driving force behind ArcServe, and the CEO of Cheyenne Software when it was acquired by Charles Wang's Computer Associates.

Many more of you remember Charles Wang. That's particularly true if you worked at Computer Associates during the 1990s, and especially between the years of 1994 and 2000.

Stephen Richards certainly will remember Charles Wang. Richards was the former managing director of CA Australia and New Zealand, and later headed worldwide sales, who got seven years for securities fraud at CA.

You can bet that Sanjay Kumar, the CEO at CA when the music stopped and the investigators came knocking, hasn't forgotten Wang either. Indeed Wang's protégé and handpicked successor was given 12 years to think about Charles Wang and the way he ran Computer Associates during the era of "the one headed dragon."

Charles Wang left CA before the securities fraud investigations took off, and he was never prosecuted. And it needs to be said he protested his innocence vigorously.

The statute of limitations on these crimes long ago expired, but Wang's protestations of innocence have continued unabated.

There is, however, the small matter of the more than $500 million that CA Technologies' Board is still said to be pursuing from Wang.

Here's why. As the New York Times reported in 2007, CA's Special Litigation Committee found, "Fraud pervaded the entire CA organization at every level, and was embedded in CA’s culture, as instilled by Mr. Wang, almost from the company’s inception."

The report said a lot more as well, according to the Times.

"Mr. Wang created a 'culture of fear' at Computer Associates — now called CA — and deliberately put inexperienced executives in senior positions so that he would have more control, according to the report. He discouraged executives from meeting with each other and arbitrarily fired managers or employees who disagreed with him."

Most damningly, as the Times' story in 2007 noted, the board's report found that that "from 1994 to 2000 [emphasis added], Mr. Kumar undertook the fraud 'often at the explicit direction of Mr. Wang (and at other times to avoid Mr. Wang’s anger)'.”

Wang vigorously disputed the board's finding.

If CA didn't have a happy time of it after Wang left, Wang hasn't had a happy time of it of late. His IPTV company NeuLion and the hockey team he owns — the Islanders — are losing the kind of money that makes even a billionaire blush. And his attempt to merge two charities — Smile Train and Operation Smile — and potentially put his own people in charge of a lot of the funds drew the kind of publicity a colorful entrepreneur can do without.

Had Wang been successful merging Smiling Train and Operation Smile (he wasn't) he would have controlled $100 million of the merged entities' funds via a new legacy fund of which he would be chairman emeritus. That's because as chairman Wang could have appointed four of the five board members who would then have determined how to disperse and invest the loot, according to reports.

One of the board members of Smile Train was Roy Reichbach. And that's an interesting point, which we will get to shortly.

But first, someone else who hasn't forgotten Charles Wang in all those years is former Computerworld Hong Kong editor Don Tennant, who these days writes a blog for ITBusinessEdge. And it's his most recent piece which brings us all the way back to the sad story of ReiJane Huai.

You see, Huai and Wang continued their personal and professional association long after both had left CA.

They were close enough indeed, that Wang along with Reichbach arrived at Huai's house not long after the latter's death. Wang stayed in the car, according to local reports, while Reichbach went into the house.

We'll let Tennant take up the story from here:

"Reichbach, Huai’s 'longtime legal adviser,' is also Wang’s longtime legal adviser. Reichbach was vice president, legal, at Computer Associates from 1994 to 2000 [emphasis added], and he currently serves as corporate secretary and general counsel at NeuLion, Wang’s struggling IPTV services provider that I wrote about in December in my post, 'As Charles Wang’s World Crumbles, Justice is Served'. NeuLion has been hemorrhaging money that Wang’s crumbling financial empire can ill afford – it lost over $19 million in 2009, over $17 million in 2010, and another $7.2 million in the first six months of this year."

You can follow Tennant following Wang here and you can be sure that if there's more to come Tennant will let you know.

Here's how he wrapped up his latest piece following Huai's death:

"Was he influenced by others whose skewed sense of ethics and morality made the path he ultimately chose seem acceptable? Those questions raise the one that ultimately needs to be asked: If Huai had not fallen in with the Wang crowd, would he still be alive today?"

Support is available for anyone who may be distressed by phoning Lifeline 13 11 14; Mensline 1300 789 978; Kids Helpline 1800 551 800.

Andrew Birmingham was the editor-in-chief of Computerworld in 1994 and 1995. He remembers Computer Associates from those days. Maybe you do as well. If so email him at andrewbirmingham2010@me.com

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More about Andrew Corporation (Australia)CA TechnologiesCA TechnologiesCheyenneCheyenne SoftwareErnst & YoungErnst & YoungIslandMorgannStorWang

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