CA to provide customer contracts in gov't investigation

Computer Associates International is cooperating with a formal request from the US Department of Justice and the US Securities and Exchange Commission for contracts with 10 of CA's customers, in an ongoing investigation in the company's accounting practices, it says.

          Computer Associates International is cooperating with a formal request from the US Department of Justice and the US Securities and Exchange Commission for contracts with 10 of CA's customers, in an ongoing investigation in the company's accounting practices, it says.

          CA chairman and CEO Sanjay Kumar says his company volunteered to help the DOJ and SEC after CA learned in December that some of its customers had been asked to supply their contracts with CA to investigators.

          "As has been reported, a small number of customers were asked by the government for a copy of their contracts with CA. We approached the government and invited them to ask us instead of our customers. In response, they formally asked for the information," Kumar said during CA's third-quarter earnings conference call last week.

          CA will not comment on which customers were asked to provide their contracts, says Bob Gordon, a CA spokesman. An SEC spokesman declined to comment on the investigation, and a call to the US Attorney's Office for the Eastern District of New York was not immediately returned.

          The two government agencies have been investigating the enterprise software vendor for over a year on allegations that the company improperly booked revenue from the sale of its products. In November, the Wall Street Journal reported that the SEC has questioned several former CA employees about the company's revenue booking procedures, focusing on whether the company booked maintenance contracts with the sale of software licenses in order to book as much revenue as possible up front, in violation of accounting rules.

          The Islandia, New York, company reported a net loss of $US44 million for the third quarter, as revenue fell below Wall Street expectations.

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