TAB sues Keycorp for $6m

TAB sues Keycorp for $6m

ASX-listed technology company, Keycorp, is considering action against one of its US vendor partners and its Australian distributor after one of its key customers, gambling agency TAB Limited, revealed that it would sue the company for at least $6 million.

In 1998 Keycorp announced the largest single product order in the company’s history. TAB Limited was progressively building a new network called TABLink that would enable all of the electronic machines in the NSW network to deliver activity data to a central monitoring system housed in the company’s Ultimo (Sydney) headquarters. Keycorp would design and manufacture gaming machine interface cards for the project.

TAB Limited has since taken legal action against Keycorp in the Supreme Court of NSW in respect of “a device supplied by Keycorp and deployed by TAB in NSW gaming machines,” installed during 2000 and 2001. TAB is yet to disclose the full amount of damages, but expects it to be at least $6 million.

Keycorp claims that the problems were caused by a defective component in the device, manufactured by a US company.

“Keycorp had no reason to suspect that the component was faulty and as soon as it became aware of possible problems, began working with TAB to identify the cause and minimise the impact on TAB,” the company said in a statement.

It said the damages might be covered by its insurer. But it has also taken legal advice and “believes it has causes of action against the US manufacturer and Australian distributors of the component.”

The company declined to name the manufacturer or distributor.

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