Full Breakdown
Nidec Founder and Former Executives Held Civilly Liable for Accounting Missteps, Shares Plunge to Decade Low
By Drooid · · How we work
Findings and Immediate Market Reaction
An independent committee tasked with reviewing Nidec Corp.’s accounting practices concluded that founder Shigenobu Nagamori and several current or former executives bear civil liability for damages arising from years of improper accounting. The committee’s report, submitted to the board last week, triggered Nidec’s shares to fall to their lowest level in a decade during early-morning trading in Tokyo, dropping as much as 2.8 %. The decline follows a broader loss of more than one-third of the company’s market value since late September, when the sudden exit of former CEO Mitsuya Kishida was announced.
Accounting Misconduct and Prior Governance Issues
Nidec disclosed that multiple directors and executives violated corporate laws while performing their duties. The committee named former CEOs Jun Seki and Mitsuya Kishida, former chairman Hiroshi Kobe, former president Hiroyuki Yoshimoto, former senior vice president Akira Sato, and chief legal officer Kazuya Murakami as additional parties bearing liability. The firm’s auditor, PwC Japan, withheld an opinion on the accounts, stating it could not obtain sufficient and appropriate evidence. Nidec is seeking to obtain the auditor’s sign-off and submit a compliance report to the Tokyo Stock Exchange by the end of October to avoid a delisting notice.
Financial Fallout and Shareholder Shifts
The accounting fallout coincided with a ¥519 billion operating loss for the fiscal year ended March and a ¥632 billion impairment charge. Nidec projects a return to ¥200 billion in profit on ¥2.8 trillion of sales for the current fiscal year, but the legal claims and audit uncertainty complicate any potential sale. Oasis Management Co. disclosed that its stake rose to 9 %, making it the largest disclosed shareholder, ahead of Nagamori’s direct holding. Oasis founder Seth Fischer urged outside directors to hire financial advisers and consider non-binding proposals to guard against an unintended delisting.
Company and Regulatory Responses
Nidec announced it will publish a partially redacted version of the committee’s findings in the coming days and is working to regain auditor approval and convince the Tokyo Stock Exchange that internal controls have been repaired. The firm has been placed on a special alert security status since October 2025 due to the need for improved internal management. Newly appointed CEO Michio Kaida is tasked with restructuring loss-making businesses while responding to activist pressure.
Outlook
The combination of civil liability findings, auditor reservations, and a shifting shareholder base creates uncertainty around Nidec’s governance reforms and any future acquisition. The company’s ability to satisfy exchange requirements by the end of October will be pivotal in determining whether it remains listed and can pursue its profit recovery targets.