CA's Kumar ordered to pay £500m compensation

Sanjay Kumar, the former CEO of CA has been ordered to pay more than US$1bn (£500m) in compensation to victims of securities fraud he committed while at the company.

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Sanjay Kumar, the former chief executive of CA, has been ordered to pay more than US$1bn (£500m) in compensation to victims of securities fraud he committed while at the company.

CA has already repaid $225m (£112.3m) of that amount to a victim's fund, while Kumar must pay $52m (£26m) in the next 18 months, Judge Leo Glasser ordered.

Glasser also released Kumar from an $8m (£4m) fine imposed in November while he is making restitution. Kumar was sentenced to 12 years in prison after pleading guilty to obstruction of justice and securities fraud charges.

After his prison sentence is completed, Kumar must pay 20% of his income each year toward the remaining $746m (£373m) in restitution, Glasser ordered.

Kumar and Stephen Richards, the company's former worldwide sales head, both pleaded guilty after they were accused of fraudulent accounting practices, including falsely reporting hundreds of millions of dollars in revenue for licensing agreements during fiscal quarters in which the deals had not yet been finalised.

In early 2000, CA signed a $44.5m (£22m) licence deal with a nearly insolvent customer in which it had an ownership stake, according to court records. It then back-dated the contract so it could be recorded in the prior quarter. In the next quarter, CA reversed the revenue in its internal records but did not publicly restate its results.

The company also changed its name -- during the time Kumar was at the helm it was called Computer Associates International.

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