). On Apr. 8, three former executives, including ex-Chief Financial Officer Ira Zar, pled guilty to securities fraud and obstruction of justice. They confessed to fudging CA's accounting to boost revenues and conspiring to mislead investigators (BW -- Apr. 12). Documents filed by the feds point to involvement by higher-ups but don't name them. Kumar has denied wrongdoing, and the CA board's internal investigation has not found evidence implicating him, according to sources involved in the probe. Zar's attorney didn't return calls.
Now the company's board is on the spot. Directors would like to end the uncertainty, but they're opposed to firing Kumar without evidence that he has broken the law. "You're damned if you do and damned if you don't," says one. For now, Wall Street is reserving judgment: CA stock is trading at about 27, down 1 from the Apr. 7 close. The Securities & Exchange Commission is preparing to wrap up its probe into accounting practices at Time Warner's (TWX
) AOL online division by summer, according to sources close to the investigation. The feds are zeroing in on AOL's reporting in 2001 and 2002 of a transaction with German media giant Bertelsmann. AOL had agreed to purchase Bertelsmann's stake in AOL Europe for cash in return for a $400 million reduction in price. At the same time, Bertelsmann agreed to place $400 million in ads on AOL. The $400 million was booked by AOL as ad revenues, but the SEC contends it should have been booked as a cost of sales. Time Warner says it continues to cooperate with the SEC, as well as the Justice Dept., which is also conducting an inquiry into AOL's accounting practices. The management turmoil at Coca-Cola (KO
) just doesn't end. On Apr. 11, General Counsel Deval Patrick resigned, the eighth top executive to leave during the tenure of Chief Executive Douglas Daft. Patrick had been feeling the heat for his handling of a whistleblower lawsuit that led to government probes of the company's accounting. More departures are likely as Coke's board moves to bring in a successor to Daft, who plans to retire by yearend after five years at the helm. Sources say that Coke's board aims to finish the search by June at the latest. Meanwhile, the star-studded board is under fire from institutional investors. On Apr. 12, the California Public Employees' Retirement System said it would withhold support at Coke's Apr. 21 annual meeting for the reelection of more than half of the board. CalPERS says some of them have conflicts of interests from their business relationships with Coca-Cola. Intel (INTC
) laid to rest fears of a slowdown in tech spending. The chipmaker on Apr. 13 reported net income for the first quarter nearly doubled from a year earlier, to $1.7 billion, after the $225 million settlement of a patent-infringement lawsuit. Revenue rose 20%, to $8.1 billion. Despite concerns about continued slow corporate spending, demand for some of Intel's latest chips is so hot that PC makers are reporting shortages. For the second quarter, Intel expects several new chip updates to help keep the good times rolling. DuPont (DD
) said on Apr. 12 it will cut 3,500 jobs, or 6% of its workforce. The move comes as the industrial giant is trying to trim its annual costs by $900 million as it prepares to sell its $6.9 billion-in-sales nylon and spandex business by the end of the month. But the company had some good news, too: On Apr. 14, it raised its 2004 forecast for earnings before special items by 10 cents a share, to as high as $2.30, thanks to strength in agricultural and industrial businesses. -- Hospital operator Tenet Healthcare (THC
) is the subject of two new federal inquiries.
-- Lifted by mass-market sales, Levi Strauss cut its first-quarter loss from a year ago.
-- Kraft Foods (KFT
) CEO Roger Deromedi, out since Mar. 27 because of a viral infection, will return on May 10. Vroom: Harley-Davidson (HDI
) shares gained 7%, to close at an all-time high of $59.50 on Apr. 14 after the motorcycle maker reported a jump in first-quarter earnings. Profits rose 10% over last year, which had been lifted by 100th anniversary promotions.