Nidec considers suing executives after annual loss of 564,624 million yen
Key Facts
Nidec said in a statement dated 16 October 2026 that it would consider legal action over accounting irregularities, including claims for damages, and announce its decisions as soon as they are made. The review of legal liability covers current and former directors, auditors and vice presidents, according to the company's disclosure. The committee investigating executive liability concluded that several officials were believed to be liable for damages arising from the irregularities. The committee named Shigenobu Nagamori, Hiroshi Kobe, Akira Sato, Hiroyuki Yoshimoto, Jun Seki and Mitsuya Kishida among those covered by that conclusion. It said damages should be determined according to "each official's degree of contribution" to the harm.
The liability review follows results Nidec announced in September for the fiscal year ended 31 March 2026, when it recorded losses despite higher sales. Sales totaled 2,708,705 million yen, up 3.9% year on year, according to the earnings statement. The company posted an operating loss of 518,978 million yen for the same fiscal year. The loss attributable to owners of the parent totaled 564,624 million yen, according to figures announced by Nidec. In a disclosure on charges booked in its annual results, the company reported impairment losses on non-financial assets totaling 632,135 million yen.
The accounting irregularities cited by Nidec included premature revenue recognition, according to its annual results disclosure. They also included understated provisions and overstated inventory valuations. In its automotive products business, Nidec booked provisions for contract losses of 22,496 million yen, according to the statement on financial charges issued in September. The company also incurred special investigation and related expenses of 30,522 million yen in the reported results. Nidec listed the cost under "special investigations and related expenses" in its disclosure of expenses recorded.
The investigations date back to the previous year, with Nidec receiving the first investigation report in February 2026 and the final report in April. By the time it announced results in September, the company had already restated comparative figures and corrected specific accounting irregularities. But the auditor declined to express an opinion on the consolidated financial statements, according to Nidec's disclosure concerning the audit report. The auditor said it had been unable to obtain "sufficient appropriate audit evidence" to provide a basis for an opinion on those statements. It remained unable to verify the completeness and appropriateness of the company's corrections, despite the restatement of prior financial statements.
The restatement of prior financial statements revealed that dividends and share buybacks in previous fiscal years had exceeded the amount legally available for distribution under Japanese law, according to Nidec. The company had also received a request from an individual shareholder to file a lawsuit seeking to hold current and former directors liable. The shareholder's request included pursuing liability and seeking other remedies, according to the company's disclosure of the request. In a separate review concerning Mitsuya Kishida, Nidec said he had on some occasions made statements or engaged in conduct concerning financial reporting. The company described those statements and actions as ones that "cannot necessarily be considered appropriate," according to its statement on the review's findings.
On the causes of the irregularities, the company's investigation identified excessive pressure to meet targets among the root causes, according to Nidec's published internal control improvement plan. Remedial measures include separating the accounting function from the business management function to strengthen accounting independence within the company. Nidec submitted a revised remediation plan to the Tokyo Stock Exchange covering governance and organizational culture reforms, according to its disclosure on the plan. Its commitments include ongoing monitoring of the implementation of the remedial measures announced by the company. Nidec set a target of around 20 October 2026 to publish the revised report on the investigation into executive liability, after completing redactions.