Share this story...
Latest News

Western Digital seeks arbitration on Toshiba chips unit sale

FILE - In this Tuesday, April 11, 2017 file photo, Toshiba Corp. President Satoshi Tsunakawa speaks during a press conference at the company's headquarters in Tokyo. Toshiba, whose U.S. nuclear unit Westinghouse has filed for bankruptcy protection, is reporting a 950 billion yen ($8.4 billion) net loss for the fiscal year ended March. Tokyo-based Toshiba called the results released Monday, May 15, as projections, rather than results, since they lack the company's auditors' approval, but it was in line with what it had said recently. (AP Photo/Shizuo Kambayashi, File)

TOKYO (AP) — Western Digital is seeking arbitration in a dispute with its joint venture partner Toshiba Corp. over the sale of the Japanese electronics giant’s computer-chip business.

Toshiba wants to sell the lucrative chips unit to repair its finances, but Western Digital is demanding Toshiba first obtain its consent.

Tokyo-based Toshiba forecast Monday a 950 billion yen ($8.4 billion) loss for the fiscal year that ended in March. That report was issued without the endorsement of Toshiba’s auditors.

Western Digital said in a statement that several of its SanDisk subsidiaries have filed a request for arbitration with the ICC International Court of Arbitration over plans to sell its NAND flash-memory joint ventures with Toshiba. The request seeks to block the sale, arguing it would be violation of their joint venture agreement. The arbitration will take place in San Francisco, it said.

“Seeking relief through mandatory arbitration was not our first choice in trying to resolve this matter. However, all of our other efforts to achieve a resolution to date have been unsuccessful, and so we believe legal action is now a necessary next step,” said Western Digital Chief Executive Steve Milligan.

Toshiba President, Satoshi Tsunakawa, who has acknowledged that the company’s strategy based on Westinghouse was a mistake, said he doesn’t think Western Digital can block Toshiba.

“With regards to your first question as to whether this may delay bidding procedures, we will try to dispel such concerns by explaining to all potential bidders the validity of Toshiba’s position,” he told reporters.

Toshiba described the financial results it released Monday as “projections,” rather than results. The dismal figures were in line with earlier estimates.

Toshiba’s U.S. nuclear business Westinghouse has filed for bankruptcy protection. Its losses, and a years’ long accounting scandal are imperiling the company’s future. Toshiba’s earnings reports, meanwhile, have been delayed by questions over its acquisition of U.S. nuclear construction company CB&I Stone and Webster.

Toshiba said it expects to post a profit of 50 billion yen ($442 million) for the fiscal year through March 2018.

Costs in the nuclear industry have ballooned since the March 2011 tsunami in northeastern Japan, when three reactors at the Fukushima Dai-ichi nuclear plant sank into meltdowns, and stricter safeguards are required to operate and build reactors.

___

Follow Yuri Kageyama on Twitter at https://twitter.com/yurikageyama

Her work can be found at https://www.apnews.com/search/yuri%20kageyama

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Related Links