Nidec report points finger at founder for accounting scandal
Nidec Corp. founder Shigenobu Nagamori created a corporate culture that led to losses being improperly deferred and inaccurately reflected in earnings, according to a board committee report detailing how the electric-motor manufacturer became embroiled in financial turmoil.
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Nagamori and other past executives are potentially liable for civil damages as a result, the company said in a redacted report released on Tuesday, adding that it will consider pursuing legal measures against them after it has restated financial results.
The report, covering events going back roughly a decade, puts much of the blame on the hard-charging founder for creating an environment that tolerated non-compliant accounting. But the prolonged fallout of the scandal suggests systemic failures that raise questions about how easily the company can restore its credibility in the face of delisting risk and activist pressure.
The 251-page document describes how Nagamori, at one point, insisted on achieving a ¥240 billion ($1.5 billion) operating profit target, even if that meant required expenses would not be booked during the appropriate time frame.
Until last year, Nagamori held approval authority over minor asset transfers, write-offs and personnel changes. He even reprimanded executives and accounting officers who brought up impairments in order to prevent profits from falling below targets, according to the report.
In an instance from late 2016, Nagamori and former Chairman Hiroshi Kobe ignored violations of standard accounting practices when they were approving and carrying out a project focused on fixing the company’s improper bookkeeping.
Apart from Nagamori, an initial report on Friday named Kobe as well as former Chief Executive Officers Jun Seki and Kishida, former President Hiroyuki Yoshimoto and former Senior Vice President Akira Sato as liable for damages.
The scope of any damages to be claimed should be determined according to their degree of contribution, according to Nidec. Executives will also be found liable for the ¥27.6 billion yen cost of the investigation, employing auditors and paying penalties for breaching the requirements of a listed company.
Share slump
The prolonged crisis has hammered Nidec’s shares, which have been trading at the lowest since 2016 this week and have lost more than a third of their value since late September, when then-CEO Mitsuya Kishida left. Newly appointed CEO Michio Kaida is now seeking to restructure loss-making businesses and respond to activist pressure.
Oasis Management Co. said last week that its stake in Nidec had risen to 9%, making it the largest disclosed shareholder and placing it ahead of Nagamori’s direct holding. Oasis founder Seth Fischer has urged Nidec’s outside directors to hire financial advisers and seek preliminary, nonbinding proposals as protection against an unintended delisting.
Nidec has been designated a security on special alert since October 2025 because of the need to improve its internal management system. PwC withheld its opinion on the accounts after saying it was unable to obtain sufficient and appropriate evidence. The company is trying to obtain the auditor’s signoff and submit a report to the exchange as it seeks to avoid a delisting notice.
Nagamori, 82, built Nidec through decades of aggressive acquisitions and a high-pressure operating culture, but struggled to hand over control. He relinquished his last formal title in February but remains one of Nidec’s largest shareholders.
The accounting fallout has devastated Nidec’s finances. It reported a ¥519 billion operating loss for the year ended March after recording a ¥632 billion impairment. The company forecast a return to ¥200 billion in profit on ¥2.8 trillion of sales in the current fiscal year.
The legal claims and ongoing uncertainty over the accounts and a potential delisting may also complicate a sale of the company. Any buyer would have to assess the legal claims, audit questions and whether Nagamori, who remains a major shareholder, would support any transaction.
