Full Breakdown
Nidec Shares Plunge as Accounting Scandal Targets Founder
By Drooid · · How we work
Core Event: Share Collapse and Founder’s Wealth Erosion
Nidec Corp.’s stock fell to its lowest level in a decade, losing more than a third of its value since late September. The plunge erased at least $978 million from founder Shigenobu Nagamori’s personal fortune, reducing his net worth to roughly $3.3 billion, according to the Bloomberg Billionaires Index. The decline follows an investigatory committee’s finding that Nagamori and other executives are liable for damages tied to years of widespread accounting fraud.
Background: Culture and Misconduct
A 251-page board committee report released this week attributes the scandal to a corporate culture fostered by Nagamori that tolerated improper deferral of losses. The document cites instances where Nagamori pressured teams to meet a ¥240 billion operating-profit target by delaying expense recognition. It also notes that he and former chairman Hiroshi Kobe ignored accounting violations during a 2016 project aimed at correcting prior bookkeeping errors. The report implicates former CEOs Jun Seki, Mitsuya Kishida, Hiroyuki Yoshimoto and senior vice-president Akira Sato as liable for varying degrees of damage.
Financial Impact and Legal Liability
Nidec disclosed a ¥565 billion net loss for the fiscal year ended March after recording a ¥632 billion impairment. An additional ¥27.6 billion is earmarked for the investigation, auditor fees and penalties. The company announced it will consider legal action against the implicated executives after restating its financial results. The audit firm PwC withheld its opinion, citing insufficient evidence, prompting Nidec to seek a new auditor’s sign-off to avoid a delisting notice.
Official Response and Governance Changes
Nidec appointed Michio Kaida as the new chief executive, tasking him with restructuring loss-making units and addressing activist pressure. The firm also indicated that it is exploring the hiring of financial advisers and reviewing non-binding proposals to protect against an unintended delisting, as urged by activist investor Oasis Management’s founder Seth Fischer.
Investor and Activist Pressure
Oasis Management, now holding a 9 % stake, has become the largest disclosed shareholder, surpassing Nagamori’s direct holding. Fischer has called on Nidec’s outside directors to secure independent advice and strengthen internal controls, highlighting concerns that the ongoing legal claims and audit uncertainties could jeopardize any future sale of the company.