The National Bank of Australia, is being sued by an Australian software developer for $A50 billion.
Claims by developer John Maconochie through his companies Idoport and Market Holdings relate to the sale of his automated dealing system AUSMAQ to the NAB in 1996 for $A7 million.
According to a statement made by NAB to the Australian Stock Exchange last week, Idoport was engaged by the bank as a consultant and was to entitled to a share of future profits generated by AUSMAQ -a partly automated system for investing in managed funds and debentures.
However, in the case which opened last Tuesday at the New South Wales Supreme Court, Maconochie through his companies alleges AUSMAQ was not developed to its full potential and is claiming a share of the profits he says should it should have generated, as well as a share of the profits of separate bank projects which used AUSMAQ's intellectual property.
NAB which is strongly contesting the case says in the ASX statement that it bought the software as a venture capital opportunity and despite spending $28 million - five times more than Maconochie said would be needed - on it, the software has not yet turned a profit because as a business concept it's flawed.
The bank says the claim for damages is misconceived and based on a large number of false assumptions and it claims to be back by more than 100 witnesses.
NAB notes that shortly after it bought AUSMAQ, Maconochie projected revenues for the business of $A18.3 million of the year to June 1999, leading to a projected performance bonus for himself of $A2.5 million. The bank says AUSMAQ has in fact made a loss in each of its years of existence.
The case is expected to continue for at least a year.
In New Zealand AUSMAQ is used by NAB subsidiary BNZ’s private banking division which is serviced by AUSMAQ in Wellington.