Toshiba says it's suing Western Digital for $1billion

TOKYO: Toshiba Corp sued Western Digital Corp in a Japanese court, asking for 120 billion yen ($1.1 billion) in damages and seeking to stop the US company from interfering in the sale of its chip unit, escalating a legal tussle between the companies.

The litigation filed on Wednesday in Tokyo District Court, seeks to stop Western Digital from making ownership claims over the enterprise that Toshiba is trying to sell. The Japanese company said in a statement that Western Digital’s employees improperly obtained proprietary information.

The relationship between Toshiba and Western Digital has gotten more acrimonious, as Toshiba moves toward a sale of the flash-memory division.

Last month, Western Digital invoked an arbitration clause in their business agreement, seeking to block Toshiba’s transfer of ownership of the unit to a separate legal entity in preparation for a sale. Toshiba, which has since reversed that transfer, then had its lawyers send a letter demanding that the US company stop its “harassment” as Toshiba tries to sell the business.

“Toshiba has made very clear that they want to move the process along without Western Digital’s obstruction, which, frankly, hasn’t been particularly constructive,” said Damian Thong, an analyst at Macquarie Group Ltd. “This clearly highlights the deterioration of the relationship between the two partners.”