Nidec Corporation

Hong Kong-based investment fund Oasis Management announced on the 7th that it has asked Nidec's board of directors to begin a preliminary study of taking the company private. Regarding the securities report Nidec filed on September 30, PwC Japan Audit Corporation declined to express an audit opinion, saying it did not have sufficient basis for an opinion on the consolidated financial statements. Oasis argues that with a disclaimer of opinion from the independent auditor and no guarantee of being able to obtain a clean opinion on its own, the company should prepare for the risk of an unintended delisting. In response to the audit's findings that executives and employees involved in or who directed accounting fraud remain in responsible positions in the financial reporting process, Oasis said it is shocked and deeply disappointed. According to Oasis, it has been asking Nidec to consider going private since December 2025, but the latest request does not demand an immediate decision to go private; rather, it asks that outside directors take the lead in soliciting non-binding preliminary proposals from domestic and overseas operating companies and private equity firms. As of September 9, Oasis held 7.97 percent of Nidec's shares.

Oasis Management Company Ltd. is urging Nidec Corporation's Board of Directors to promptly begin a preliminary review of privatization options, calling on the company's outside directors to independently engage financial advisers and solicit preliminary, non-binding proposals from strategic buyers and private equity firms in Japan and overseas. The activist shareholder said it was deeply disappointed by Nidec's recent disclosures, after the securities report filed by Nidec on September 30 included a disclaimer of opinion from the independent auditor, citing findings that certain officers and employees who participated in, directed, or had knowledge of improper accounting practices, or who provided false explanations to the independent auditor, continue to hold positions of responsibility within the financial reporting process. Oasis warned that Nidec's board must confront the risk of an unintended delisting if the company fails to obtain an unqualified audit opinion and the Tokyo Stock Exchange determines that its internal management system has not been adequately established. Oasis said it has urged the company to consider privatization since December 2025, warning that shareholders could suffer substantial losses if Nidec were delisted before they had an opportunity to sell their shares at a fair price reflecting the company's intrinsic value. Oasis stressed it is calling for a preliminary review to assess the feasibility and terms of a potential privatization, rather than a decision at this stage to proceed with a transaction, and said comparing a standalone strategy with privatization proposals is important in determining the strategic direction of the company's second founding.

Rating and Investment Information (R&I) said on the 2nd that it has downgraded Nidec's issuer rating and long-term bond rating from 'AA-' to 'A+', and placed the ratings on its Rating Monitor with a direction toward a further downgrade. It said that the company's management turnaround is only halfway done, and that its auditing firm PwC Japan has once again issued a disclaimer of opinion, making it necessary to scrutinize the risk that the series of problems will further hurt its creditworthiness. Nidec said on September 30 that it recorded an impairment loss of 632.1 billion yen in its fiscal year ending March 2026 and fell into a net loss of 564.6 billion yen. It plans operating profit of 200 billion yen for the fiscal year ending March 2027, but on a fundamental basis this is far below the level of operating profit and profit margin outlook that R&I had assumed before the series of accounting problems came to light, and its earning power is deemed inferior even relative to an 'A+' rating.

Nidec reported third-quarter earnings per share of ¥8.48, down 80.5% year over year from ¥43.57. Revenue for the fiscal third quarter ended December 31, 2025 rose 4.8% year over year to ¥681.46B. Operating profit fell 30.9% year over year to ¥28.43B, and operating margin narrowed to 4.2% from 6.3%. The results were disclosed in a Nidec press release.

In Tokyo stock trading on the 1st, Nidec's share price fell sharply by 255 yen from the previous day to 2,100 yen. After the company announced its earnings the previous day, its auditing firm issued a disclaimer of opinion on its financial statements, prompting a flood of selling on fears of delisting. At one point the stock dropped 467 yen to 1,888 yen, hitting a year-to-date low, and the disclaimer of audit opinion marked the second consecutive fiscal period. This is because some of the executives and employees involved in the misconduct are still responsible for the company's financial reporting, and market participants said it "instilled in investors a sense of distrust toward the corporate governance system itself."

PwC Japan, the audit firm handling Nidec's audit, said on the 1st that it declined to express an audit opinion on the company's consolidated financial statements because it was unable to obtain sufficient and appropriate audit evidence and judged the impact to be pervasive. The firm indicated it intends to continue discussions with Nidec, saying it wants to fulfill its responsibility to ultimately issue an audit opinion, but did not specify a timeframe. The explanation was given alongside Nidec's press conference. Nidec announced on September 30 that it will record an impairment loss of 632.135 billion yen on non-financial assets in its operating profit and loss for the fiscal year ending March 2026, and as a result, its net loss for the period is expected to be 564.6 billion yen, a reversal from the previous year's 84.6 billion yen profit. PwC Japan issued a disclaimer of opinion on these financial results.

Nidec President and Executive Officer Ryoichi Akita said at a press conference on the 1st that, regarding the audit firm's decision to issue a "disclaimer of opinion" on the company's securities report for the fiscal year ending March 2026, "we will resolve the remaining issues by October in order to obtain an audit opinion." He also stated that, in response to the massive impairment loss recorded in that fiscal year's earnings, "we will carry out structural reforms with no sacred cows."

Nidec's pretax loss for the fiscal year ending March 2026, announced on September 30, came to 496,214 million yen, falling short of the latest IFIS consensus of 170,667 million yen. According to earnings forecasts released the same day, pretax profit for the fiscal year ending March 2027 is projected at 180,000 million yen, 23.2% below the IFIS consensus. The same forecasts also project interim pretax profit of 110,000 million yen.

Nidec announced on the 30th that it will record an impairment loss of 632.135 billion yen on non-financial assets in its operating profit and loss for the fiscal year ending March 2026. As a result, the company's net profit for the period will fall into a loss of 564.6 billion yen. The impairment loss far exceeds its previous forecast of around 250 billion yen. In addition to accounting and quality misconduct coming to light, the company's electric vehicle-related business has been sluggish, and President Mitsuya Kishida resigned on the 29th. Last year, the company was found to have engaged in improper accounting, including inflating profits and postponing the recognition of expenses, and Shigenobu Nagamori resigned as representative director at the end of the year and as honorary chairman in February of this year. After that, quality problems came to light, and an investigative committee set up by the company determined in September that there were 844 instances of improper conduct, including changes to the design and manufacturing processes of components for home appliances and automobiles.

Nidec, a major motor manufacturer, said on the 28th that it is considering changes to its executives, including President Mitsuya Kishida, in the wake of accounting and quality misconduct. The company is also considering large-scale impairment charges in its fiscal 2026 results for the year ending March, to be announced at the end of September, and the amount is expected to reach at least several hundred billion yen. The accounting fraud came to light in September 2025, and a final report by a third-party committee published in April 2026 concluded that the impact of inflated net profit from the misconduct totaled 160.7 billion yen cumulatively through the April-to-June quarter of 2025. The company had indicated it would record an impairment loss of around 250 billion yen, mainly in its automotive components business, in connection with the revision of past financial statements, but the figure now looks set to grow even larger.

Nidec shares plummeted as much as 18% to ¥2,405.0 on Monday after Bloomberg and other major outlets reported on a release by Japanese business publication Diamond Online stating the company is considering a ¥1T ($6.3B) impairment charge that could effectively wipe out its net profits from the past decade. According to the report, the massive write-down would be recorded for the fiscal year ended March 2026 as the world's largest maker of precision motors tallies the financial fallout from a long-running accounting and governance crisis. The report also noted that Nidec has decided to dismiss President and CEO Mitsuya Kishida, with an official announcement scheduled for September 29. Nidec issued a statement acknowledging that reports regarding executive changes and the ¥1T impairment consideration were factually grounded, confirming that management restructuring and large-scale asset write-downs are under review, though no finalized decisions have been formally disclosed. A ¥1T hit would mark the largest write-down in Nidec's history, following internal and independent probes that uncovered more than 1,000 instances of accounting improprieties alongside 844 cases of quality-control misconduct over the last decade. The company has already been dropped from the Nikkei 225 Index and now faces heightened delisting risks as regulators dig deeper.

Nidec said on the 15th that it is considering holding an extraordinary shareholders meeting within the year. In response to accounting and quality fraud issues, the company will report and seek approval for its fiscal 2025 business and consolidated financial statements and audit reports, which were not put to a vote at this June's ordinary general meeting. At the board meeting held the same day, it was resolved to set September 30 as the record date necessary for convening the extraordinary shareholders meeting. Shareholders listed in the shareholder registry as of that date will be entitled to exercise voting rights, and the meeting will be held within three months. The detailed schedule and venue will be announced at a later date.

Nidec, the major motor manufacturer, announced on the 10th that an individual shareholder has filed a shareholder derivative lawsuit seeking approximately 28.7 billion yen in damages from founder Shigenobu Nagamori and one other former director, two people in total. The defendants are Nagamori and Hiroshi Obu, both former directors of the company. The suit was filed with the Kyoto District Court, and the plaintiff alleges that Nagamori and the others carried out illegal share buybacks and dividends exceeding the distributable amount under the Companies Act. This is the first shareholder derivative lawsuit against Nidec to come to light since the accounting irregularities were discovered.

Nidec announced on the 4th the release of a report from the investigation committee established to look into suspected inappropriate practices regarding product quality, confirming a total of 844 cases of quality misconduct across multiple business divisions within the group, including 60 cases of significant quality issues. The committee pointed out that excessive performance pressure and insufficient quality governance combined to entrench an "unhealthy state" within the organization. Nidec stated it will proceed with measures to prevent recurrence, such as personnel disciplinary actions and revisions to quality regulations, and aims to correct past annual securities reports and submit the report for the fiscal year ending March 2026 at an early date. The committee chairman, Toshihiko Itami, noted that it is extremely serious that misconduct of this scale has come to light in the quality assurance area, following the accounting irregularities. While it was pointed out that founder Shigenobu Nagamori and other management had exerted intense pressure to achieve performance targets, no instructions or involvement in quality misconduct were confirmed. Nidec has been designated as a special attention stock by the Tokyo Stock Exchange due to the accounting irregularities, and faces delisting if internal management systems are not improved within one year.

Nidec Corporation has disclosed the full investigation report from its outside-expert committee, which found widespread quality-related misconduct including falsified test results and violations of manufacturing rules. The company acknowledged that excessive pressure to meet short-term targets and cost reductions, combined with an inefficient management system, allowed these issues to persist. Nidec stated that the misconduct has no material impact on past financial statements and plans to correct past securities reports. It will implement reforms such as granting quality assurance managers authority to suspend shipments and launching quality audits. Disciplinary actions will follow based on the committee's findings.

Nidec announced on the 5th that it will miss the Tokyo Stock Exchange deadline for disclosing its April–June 2026 quarter earnings. The delay is due to the time required for investigations into accounting irregularities and quality misconduct. Companies listed on the TSE are required to disclose their results within 45 days after the end of the fiscal quarter. The company has also not yet disclosed its fiscal year ended March 2026 results, but plans to submit its annual securities report for that period by September 30. It will disclose the April–June 2026 quarter earnings as soon as work is completed after submitting the securities report.

Nidec Corporation reported that a ransomware attack on its Taiwanese subsidiary Nidec Chaun Choung Technology may have resulted in a data leak, despite no explicit evidence of exfiltration. A forensic investigation by an external agency found no logs confirming data theft, but a third party published part of a list of folder and file names on the dark web. The company said it cannot deny possible leakage of the listed data and other information, though no actual files have been confirmed as published. The attack has had no material impact on production, shipping, or other business activities, and only a minute impact is expected on Nidec's consolidated performance.

Nidec Corporation has filed an application with the Kanto Local Finance Bureau to extend the filing deadline for its annual securities report for the 53rd fiscal year ended March 31, 2026, from June 30 to September 30, 2026. The company cites ongoing investigations by a third-party committee and an external expert committee into prior financial statements, potential product quality issues, and unpaid customs duties at a consolidated subsidiary. These probes are expected to require considerable time, making it difficult to complete closing procedures and receive the audit report by the original deadline. If the extension is approved, Nidec will promptly disclose the decision.