Toshiba Corp. (TOSYY) shares plunged to a near three-week low in Tokyo Tuesday amid speculation that the sale of its flash memory business could face further delays amid a dispute with its partner, Western Digital (WDC) - Get Report and speculation that the government could step in to keep the operations under Japanese control.

Toshiba is attempting to sell its lucrative chip business in order to cover costs associated with the collapse of its U.S nuclear division, Westinghouse, and its subsequent Chapter 11 bankruptcy filing, but the process has been hampered by delays linked to the company's financial statements and a request by Western Digital to the International Court of Arbitration to block the sale.

WDC claims Toshiba breached joint venture agreements with its SanDisk unit by moving JV operations into a separate memory unit business in preparation for a disposal that could fetch as much as $20 billion.

Toshiba shares fell more than 12% in Tokyo to end the session at ¥230 each, the lowest level since April 28. The stock has plunged more than 50% since details of overruns at projects run by Westinghouse were first revealed in mid December.

The sale of the division -- the world's second-largest maker of NAND chips -- could be further complicated by speculation that the Japanese government may be prepared to offer loan guarantees to its state-backed fund, Innovation Corporation of Japan, in order to keep the group in domestic hands.

Japan's Trade Minister, Hiroshige Seko, told reporters in Tokyo Tuesday that it was "very important for Toshiba and Western Digital to cooperate" but insisted that his department wasn't going to intervene.

However, various media reports have indicated that the government may be prepared to offer loan guarantees to the Innovation fund in order to bridge the gap between its $9 billion in buyout potential and the likely $20 billion price tag for the chips unit.

Toshiba has warned that it could collapse if it doesn't sell the newly created Toshiba Memory operations and plug a gaping hole in its finances. The auction has attracted significant interest, including from Western Digital, though the U.S company is not considered to be a frontrunner.

The size of Toshiba's financial hole was confirmed Monday when it published unofficial results for the fiscal year ending March, revealing the largest ever net loss by a Japanese industrial group.

The ¥950 billion net loss was twice as large as the ¥460 billion Toshiba tallied over the previous year, after the company booked massive losses from its bankrupt U.S. nuclear unit Westinghouse Electric. Toshiba said it expects to return to profit during the year to the end of March 2018 with a profit of ¥50 billion.

Toshiba has repeatedly delayed publishing its financial results as it has been unable to secure approval from auditors. Monday's figures remained unaudited, forcing Toshiba to label the results as projections.