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Platinum Software Chairman Santoro Resigns to Devote Time to Ailing Wife

Executives: He remains on board of Irvine firm he led out of scandal. His successor as CEO, L. George Klaus, assumes post.

September 04, 1996|GREG MILLER | TIMES STAFF WRITER

IRVINE — Carmelo J. Santoro, a fixture in Orange County's high-tech community, has resigned as chairman of Platinum Software Corp. to devote time to his wife, who has cancer, and a company that manufactures cancer drugs.

Santoro will remain on Platinum's board of directors, but he has been replaced as chairman by L. George Klaus, who succeeded Santoro as chief executive of the Irvine-based company in February.

Santoro, 55, could not be reached for comment Tuesday. In a written statement, he said he had "accomplished all that I wanted to accomplish at Platinum" and that the company is "in good hands with George."

Klaus said the transition had been planned since he joined the accounting software company, and that Santoro has not been playing a daily management role for the past eight months.

Santoro took the reins at Platinum in 1994 after a bookkeeping scandal threatened to destroy the company and led to the ouster of four top executives. During an internal investigation prompted by a shareholder suit, company officials discovered that Platinum had overstated revenue in 1992 and 1993 by a total of $18 million.

Platinum is only now emerging from the turmoil that ensued, having rebuilt its sales department, trimmed its work force from 820 employees to about 350 and settled a shareholder suit for about $15 million.

Santoro, who was formerly a director of AST Research Inc. in Irvine and Silicon Systems Inc. in Tustin, said he wants to spend more time with his wife and family.

He also said he plans to focus more of his attention on Tustin-based Techniclone International Corp., a developer of cancer drugs that appointed Santoro to its board of directors in July.

Santoro "feels particularly blessed that his wife is in remission," Klaus said in an interview Tuesday. For Santoro, working with Techniclone "is a small way of giving back to medical science his own time," Klaus said.

Santoro said Platinum is "definitely on an upturn" and Klaus agreed. It's been two years since the company settled a Securities and Exchange Commission suit filed in the wake of the bookkeeping scandal. And Platinum's once-sagging balance sheet now boasts $15 million in cash, Klaus said.

Platinum posted a loss of $32.9 million for its fiscal year ended June 30, but Klaus said he hopes the company will return to profitability in the second fiscal quarter ending in December.

"We had a company that was losing money, laying off employees right and left and having customer problems," Klaus said. "All of those things have turned around 180 degrees." He added that the company is even seeking to acquire other business software companies.

Platinum's stock rose 62.5 cents per share on Tuesday, closing at $10.50 per share on the Nasdaq market. The company's stock was trading for less than $4 per share when Klaus arrived in February.

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