Building housing for Nidec's Semiconductor Solution Center in Kawasaki City. (© Sankei)
Nidec, a major Japanese motor manufacturer, released an improvement plan and status report in a flurry of announcements on January 28, following allegations of improper accounting practices that surfaced publicly in 2025.
The company concluded that an excessive emphasis on stock prices and short-term profits allowed the intentions of its founder and Honorary Chairman, Shigenobu Nagamori, to take precedence. That thereby resulted in shortcomings in governance and internal controls.
At a press conference in Tokyo, President and CEO Mitsuya Kishida apologized and pledged to rebuild the company. "We promise to foster a corporate culture that does what is right," he said.
Special Alert Status
Nidec was designated a "Security on Special Alert" by the Tokyo Stock Exchange in October 2025, and the latest report forms part of the process seeking to have that designation lifted.
Established in the same month, the Nidec Revitalization Committee drafted the improvement plan following interviews with executives and other personnel. It was subsequently submitted to the Tokyo Stock Exchange.
Separately, the third-party committee conducting the investigation aims to compile preliminary findings by the end of February, ahead of a final report. Based on those findings, Nidec promises to clarify accountability and take disciplinary action against those involved.
Regarding Nagamori, who resigned as representative director in December, Kishida said he "is not an exception" when it comes to disciplinary action. At the same time, he added that he does not believe Nagamori will be involved in "commenting on the company's management."
The company stressed that the report "focused on systems and corporate culture rather than assigning individual blame," noting that Nagamori was not interviewed as part of the investigation.
Structural Flaws and Reform Measures
The report also states that the customs issue at the Italian subsidiary — which triggered a series of allegations — was identified internally in 2022. However, no sufficient measures were taken, and the problem persisted until September 2023.
It adds that investigations are ongoing to determine whether similar cases exist elsewhere. Multiple allegations have since emerged, including the improper handling of lump-sum purchasing at the Chinese subsidiary, some of which involved members of management.
Nidec announced that it will establish a new organization to promote corporate culture reform starting in February. The improvement plan also includes measures to prevent a recurrence, such as reviewing the company's internal whistleblowing system.
High-Stakes Outlook
If the Tokyo Stock Exchange finds the company has not made sufficient improvements to its internal management systems one year after being designated a Security on Special Alert, it could face delisting.
"We will work as one company to have the designation lifted," Kishida vowed at the press conference.
But depending on the findings of the third-party committee's investigation, revisions to the improvement plan may be required.
It remains unclear whether the company can reform its entrenched corporate culture and move toward genuine revitalization.
Follow the Nidec issue and other corporate governance matters on JAPAN Forward.
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Author: Hiroto Kuwajima, The Sankei Shimbun
(Read this in Japanese)
