Computerworld - For the second time this week, Computer Associates International Inc. today went on the offensive to counter news reports about its finances.
In a morning conference call with analysts and reporters, the company acknowledged that it's the subject of a "preliminary inquiry" into its finances by the U.S. Securities and Exchange Commission (SEC). But CA officials said they don't know what the inquiry is about.
In the conference call, Sanjay Kumar, the company's president and CEO, said CA hasn't been asked for any documents or information so far.
CA, in turn, has asked the government to come forward with any questions "in an expeditious manner" to resolve any outstanding matters, he said.
"We are very eager to get the questions on the table and answer them," Kumar said. "We're confident that we'll be vindicated."
CA "flatly reject[s]" that it has used accounting tricks to boost its revenue, noting that it has used "applicable accounting principles," Kumar said. "Our [Generally Accepted Accounting Principles] reporting is appropriate and transparent ...[and is] much more detailed than our peers in enterprise software companies."
Company executives also forcefully rebutted a report published yesterday by the Bloomberg news agency alleging that CA had been forced to draw on its line of credit to repay short-term debts.
"Computer Associates has not drawn on its credit lines to pay down its commercial paper obligations," Kumar said. "CA's outstanding commercial paper obligations can be covered by cash on hand as well as cash generated from operations." The company paid down $200 million in debt in January, and another $200 million in February, he said.
According to the report by Bloomberg, CA was forced to cancel a $1 billion debt sale and borrow $1.4 billion of $3 billion in credit lines arranged by Credit Suisse First Boston in order to pay back short-term debts. The report quoted CA Chief Financial Officer Ira Zar as its source.
Bond rating firm Moody's Investors Services Inc. announced a review of CA's bond rating before the company's new bond sales, effectively scuttling the debt sale, Zar said (see story). CA had already given irrevocable notice that it was closing the line of credit on Feb. 6 when the debt sale was canceled, so it used the closing credit line to pay back its debt on another line, Zar said.
Two days ago, the company responded to separate news reports that its accounting practices are being investigated by the U.S. attorney for the Eastern District of New York by saying it hadn't been notified of
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