Sanjay Kumar fraud charges - India

25  feb 2014

Former CA head Sanjay Kumar pleaded 'not guilty' to fraud charges

Former Computer Associates chief executive Sanjay Kumar has pleaded not guilty to charges including securities fraud.

Kumar, and former CA head of sales Stephen Richards, were charged earlier in the week with securities fraud, conspiracy and obstruction of justice relating to their alleged involvement in a multi-billion dollar accountancy scandal.

Kumar has appeared in a US court and pleaded not guilty to the charges and in a statement released by his lawyer he said he, 'denies any wrongdoing and expects to be exonerated of all charges'.Computer Associates has accepted responsibility for the executives' conduct and agreed to pay $225 million in compensation to shareholders, in a bid to defer company prosecution.

Both Kumar and Richards have been ordered to return to court on 23 November. They were also told to post $5m 'personal recognisance bonds', to surrender their passports and limit their travel to within the US.

The magnitude of the accounting fraud became apparent on 26 April, when CA filed forms with the Securities and Exchange Commission restating financial data for the financial years 2000 and 2001.

An internal investigation undertaken by CA's Audit Committee found that $2.2bn of revenue was booked prematurely.

'The defendants are accused of perpetrating a massive accounting fraud that cost public investors hundreds of millions of dollars when it collapsed. Then they allegedly tried to cover up their crimes by lying,' said Deputy Attorney General James B. Comey.

'If proven true, such a conduct cannot be tolerated and the Corporate Fraud Task Force's track record shows that it will be met with severe penalities.'