Asia Times: Lawsuit leads to $1bn loss for Toshiba



	October 30, 1999	atimes.com

Japan

Lawsuit leads to $1bn loss for Toshiba

TOKYO - Toshiba Corp (TSE:6502) has announced it expects to post an extraordinary loss of 110 billion yen ($1.05 billion) in the current business year through March, due to its recent settlement of a lawsuit.

The major electric machinery maker and three of its US subsidiaries were sued for alleged defects in floppy disc controllers installed in Toshiba personal computers.

The company plans to use 50 billion yen in special profit from securities sales to offset part of the loss. The settlement is expected to increase the company's net loss for fiscal 1999 to 65 billion yen from an earlier projection of 30 billion yen. Consolidated net loss will increase to 50 billion yen from an estimated 15 billion yen.

PC users in America filed the lawsuit in March alleging that the microcode in Toshiba's controllers had a defect that caused data to be lost or corrupted when being written to a floppy disk. Toshiba claimed that while its controllers may have certain functional limitations, this would not lead to corruption of data.

Under the terms of the settlement, Toshiba has promised to install new controllers in all PCs produced for the US market from November 8, and provide free software or repairs to correct possible errors caused by the controllers. Furthermore, the company will give $100 in coupons for the purchase of Toshiba PCs and related goods to owners of machines whose warranties expired in March. Owners of PCs with unexpired warranties can receive either $200 cash or $225 in coupons.

''The settlement is neither an admission of legal responsibility nor an acceptance of allegations that our products are defective,'' a Toshiba public relations official said.

(Asia Pulse/Nikkei)

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©1999 Asia Times Online Co., Ltd.