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May 16, 2017

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Arbitration sought in sale of chip units

Source: AP | 00:01 UTC+8 May 16, 2017 | Print Edition

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 chip unit to shore up its finances, but Western Digital is demanding Toshiba first obtain its consent.

Tokyo-based Toshiba yesterday forecast a 950 billion yen (US$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 admitted 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 yesterday as “projections,” rather than results. The dismal figures were in line with earlier estimates.

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