Toshiba expected to face wrath of shareholders at Wednesday's meeting

Toshiba corp logo is seen on the top of a building at the company's headquarters in Tokyo on June 23, 2017. - AFP

CHIBA, Japan: Japan's Toshiba Corp is expected to face the wrath of shareholders at its annual meeting on Wednesday after failing to sign a deal to sell its flash memory chip unit by a self-imposed deadline.

The ailing Japanese conglomerate is rushing to sell the prized unit to cover billions of dollars in cost overruns at its bankrupt Westinghouse nuclear unit. It had promised to sign a definitive agreement with a preferred bidder by Wednesday's meeting.

But the preferred bidder, a group led by Japanese government investors and including U.S. private equity firm Bain Capital, has not agreed on conditions of the deal, two sources familiar with the talks said. They requested anonymity as the negotiations were confidential.

Some Toshiba board members are also concerned about technology leaks to South Korean chip rival SK Hynix Inc <000660.KS>, which plans to join the Bain group by providing financing, two sources said this week.

An ongoing legal dispute with Toshiba's chip partner Western Digital Corp could also derail the $18 billion sale as the U.S. company has sought a court injunction to block any deal that does not have its consent.

Toshiba's top executives are expected to apologise to shareholders for failing to present audited annual results after a prolonged accounting investigation at Westinghouse.

Last week, it flagged a net loss of around $9 billion for the year ended in March with negative shareholders' equity of around $5.2 billion, both worse than expected.

Toshiba shares are set to be demoted to the second section of the Tokyo Stock Exchange from Aug. 1, the latest in a series of humiliating developments for a company in business for more than 140 years. - Reuters