FalconStor President, CEO and Chairman ReiJane Huai Fired

FalconStor Software, Inc. announced that its President, Chief Executive Officer and Chairman of the Board, ReiJane Huai, resigned from all of his positions with the Company, effective immediately.

ReiJane Huai

The Board accepted Mr. Huai’s resignation and appointed Eli Oxenhorn, (current board member), as non-executive Chairman of the Board, James McNiel (current Chief Strategy Officer) as interim Chief Executive Officer and interim President, and James Weber (current Chief Financial Officer) as Chief Financial Officer and interim Chief Operating Officer.

Mr. Huai tendered his resignation following his disclosure that certain improper payments were allegedly made in connection with the Company’s contract with one customer.

The Company has fully cooperated with law enforcement authorities with respect to the ongoing investigation, and it will continue to do so. In addition, a special committee of the Board has been formed to conduct a full internal investigation of these matters and the special committee has retained counsel to assist it in its investigation.

Comments

That's a bad end for this well known storage veteran. Born in Taiwan, ReiJane Huai, 51, served as president and CEO since December 2000 and chairman since August 2001. He founded FalconStor in 2000 with former Cheyenne Software's execs and the company became public via Network Peripherals in 2001.

He came to FalconStor with a career in software development and management. As executive VP and GM, Asia, for CA, he was responsible for sales, marketing and the development of joint ventures in the region. He joined CA in 1996 with its acquisition of Cheyenne in 1996 for $1.2 billion, where he was president and CEO. He arrived at Cheyenne in 1985 as manager of R&D and was appointed director of engineering in 1987. While there, he served as chief architect of ARCserve, one of the first storage management solution for client/server environment.

Huai received a master's degree in computer science from the State University of New York at Stony Brook in 1985.

His salary was $341,000 in 2009.

Like DataCore, FalconStor never exploded. After more than ten years of activity, annual revenues are around $75 million. For the six months ended in June 30, net loss were $8.9 million for $37.4 million in revenues.

The company decided to change its business model from OEMs like EMC and Sun - but having now HDS - to distribution. For the last quarter, OEM revenues declined by 56% from 2Q09 to 2Q10, non OEM sales increasing 51% at the same time.