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Author of key HP-Compaq report admits deception

The lead analyst behind Institutional Shareholder Services' (ISS) influential report supporting Hewlett-Packard's acquisition of Compaq Computer has left ISS after he admitted to lying about having a law degree.

Ram Kumar was ISS' director of US research and one of its most visible analysts. ISS advises institutional investors such as pension and mutual fund managers on contested issues brought before shareholders. Institutional investors formed a significant voting bloc on the embattled HP-Compaq deal, which passed with 51.4% of shareholders' votes in favour and 48.6% against. ISS's endorsement of the acquisition was viewed by many as key to the deal's eventual passage.

Kumar told ISS he had a law degree from the University of Southern California, but admitted last week to dropping out before actually completing the degree, according to a report in the Financial Times. Kumar's name is no longer on the staff list at the Web site of ISS.

Kumar also authored ISS's report on Computer Associates International shareholder Sam Wyly's attempt in 2001 to replace the company's entire board of directors. In that proxy fight, Kumar's report initially favoured CA's management, but noted that ISS would be likely to support a bid to replace a minority of CA's board. Wyly revamped his strategy in response to Kumar's report, modifying his slate of nominees and seeking to displace only a few members of CA's board, a move that prompted Kumar to revise his report and recommend support for Wyly's slate. Despite the challenge, CA's board of directors was easily reelected.

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