Toshiba has stumped up $30 million to settle claims from a clutch of California state agencies which bought laptops containing faulty floppy disk controllers from the company.

This is bad news for Toshiba - and its shareholders. In January, the company shelled out $2.1 billion to satisfy product liability claims that it knowingly sold notebooks containing the defective component. That seemed like a pretty enormous settlement at the time. And its sheer size seemed to indicate finality. But the California deal indicates that other organisations could be lurking in the woodwork.

Toshiba sold five million PCs containing the floppy disk controller since 1985. The defect meant that data was sometimes lost or damaged when transferred from a hiard drive to a floppy disk. Toshiba continues to deny accusations that it knew of the problem. ®