June 29, 2017 / 5:04 AM / a month ago

Western Digital says Toshiba's actions in chip spat harm customers

2 Min Read

A staff member of Toshiba Corp. holds a sign board of the company's annual shareholders meeting at an entrance of the venue in Chiba, Japan June 28, 2017.Issei Kato

TOKYO (Reuters) - Western Digital Corp (WDC.O) said on Thursday that legal action and other moves taken by Toshiba Corp (6502.T) in their dispute over the sale of its prized memory chip unit were harming Toshiba's stakeholders and customers.

The two have been feuding bitterly over the $18 billion (£14 billion) sale, particularly after Toshiba chose a different consortium as it is preferred bidder.

Western Digital, which jointly runs Toshiba's main semiconductor plant, has sought a U.S. court injunction to prevent the inking of any deal without its consent.

On Wednesday Toshiba struck back with a lawsuit, saying Western Digital had interfered in the sale without due cause, adding that it is seeking 120 billion yen ($1 billion) in damages.

FILE PHOTO: The Vogtle Unit 3 and 4 site, being constructed by primary contactor Westinghouse, a business unit of Toshiba, near Waynesboro, Georgia, U.S. is seen in an aerial photo taken February 2017. Georgia Power/Handout viaFile Photo

It also blocked certain Western Digital employees from accessing databases related to their joint ventures and, in some cases, facilities as well.

"This action will have the consequence of harming not only Toshiba's stakeholders, but also our respective customers," Western Digital said in a statement.

The U.S. firm called Toshiba's lawsuit a bid to pressure it to relinquish its consent rights, and added it was confident it would succeed on the legal merits of its arbitration request.

Western Digital also reiterated its commitment to invest in their joint ventures, including the Fab 6 production line in Yokkaichi, central Japan.

Toshiba is rushing to sell the unit to cover billions of dollars in cost overruns at its bankrupt Westinghouse nuclear unit.

Reporting by Thomas Wilson; Editing by Edwina Gibbs

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