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Arbitration and auditing woes threaten Toshiba's turnaround

Legal battle will make it harder to meet March 2018 deadline for chip unit sale

President Satoshi Tsunakawa says Toshiba's chip unit sale will go ahead as planned.

TOKYO Toshiba's plan to unload its memory business has hit a potential roadblock with partner Western Digital's demand for arbitration, creating another delisting risk for the Japanese conglomerate in addition to continued friction with its auditor.

After massive losses on U.S. nuclear operations blew a hole in its finances, Toshiba spun off its cash-cow memory chip business in April and began working toward a sale. It has narrowed the field to five candidates: American private equity firm Kohlberg Kravis Roberts in partnership with the public-private Innovation Network Corp. of Japan, South Korea's SK Hynix, Broadcom of the U.S., Taiwan's Hon Hai Precision Industry and Western Digital.

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