The computer system of a Bahamas-based financial firm crashed after a former employee and ex-director of Bermuda's Telecheck Group installed a bug and demanded money to remove it, Inside Bermuda reported in its July 31 issue.

Bahamas Supreme Court Justice Hugh Small ruled on June 5 that Christopher J. Donnachie "unlawfully placed a blocking device" in software used by British American Card Company Ltd.

This is a Cayman-based subsidiary of Fidelity Bank and Trust International Ltd., which is based in the Bahamas.

He ordered him to pay his former employer damages and costs, which are still being assessed.

The computer system stopped working on April 17, 1996, after Donnachie had resigned, and technicians from Cayman and the Bahamas were unable to fix the problem. Eventually the company had to hire a computer analyst from Texas, who discovered that Donnachie had shut down the system with a "time bomb" inserted into 17 computer programmes.

According to the judgment, the crash prevented Brit-Am, as the victim company is known, from processing credit card transactions and guaranteeing cheques and, causing financial losses and expenses to restore the database.

Donnachie, a British national, worked for the Bank of Bermuda between 1982 and 1988, according to Inside Bermuda. One month before Telecheck went into liquidation here, he went to work for Fidelity as the vice president of credit card services of the British American banking division.

He is now president of Axxess International, a credit card processing firm in the Bahamas.

Donnachie initially denied knowing what was wrong with the system, but five days after the shut-down, he wrote to Fidelity on behalf of Pandon Technology SA, a company registered in Panama of which he was president, claiming that Pandon owned the software and Brit-Am had been using it under a temporary arrangement which expired on April 17. Inside Bermuda said he asked Brit-Am for about $100,000 to continue using it.

Although Donnachie developed the system for Telecheck while working in Bermuda, Brit-Am acquired the rights to the software when it bought the business operations of Telecheck's Cayman subsidiary in March 1993, Inside Bermuda said. At the time, Donnachie never mentioned his proprietary rights to it.

Justice Small rejected Donnachie's copyright claim because he did not have "a scrap of paper" to prove ownership, Inside Bermuda said.

Eventually the defendant conceded that Pandon never owned the software - in fact, that the company owned no systems, had no employees, physical office, business, clients or money.

Justice Small also ordered Donnachie to return the source codes he modified while employed by BACC.