Nidec Expects Nearly $890 Million Hit on Accounting Investigation — Update

By Kosaku Narioka

Japan's scandal-hit Nidec flagged a nearly $890 million expected hit following a monthslong investigation into accounting irregularities at the company that ultimately led to the founder's exit.

The Japanese maker of electric motors and other equipment said Tuesday that a third-party committee estimated a drag of 139.7 billion yen, equivalent to $886.8 million, on net assets as of the end of June.

Nidec also said that an additional Y250 billion of goodwill and fixed assets, primarily in its auto-parts business, could be deemed impaired. The investigation isn't completed, and the financial impact could change, the company said.

The Kyoto-based company set up the third-party committee in September to investigate potential accounting irregularities after earlier internal probes uncovered documents suggesting the company might have timed write-downs of risky assets.

Nidec, led by billionaire founder Shigenobu Nagamori, expanded its businesses over the years through a number of acquisitions. The company makes a wide variety of motors used in everything from hard disk drives to electric vehicles and produces machine tools, inspection devices and cooling equipment used in data centers.

The third-party committee said it identified many different cases of improper accounting across various operations. The committee said Nagamori pressured executives to achieve unrealistic earnings targets, ultimately leading to improper accounting.

The committee said many business units attempted to meet their performance targets by early recognition of sales, avoiding inventory valuation losses and impairment of fixed assets, changing asset valuation methods and capitalizing costs.

The committee said Nidec needed to strengthen oversight by independent directors.

Nagamori, who stepped down as board chairman in December and as chairman emeritus last week, didn't immediately respond to a request sent to the company for comment on the committee report.

On Thursday, he said, "I deeply regret that these suspicions (over inappropriate accounting practices) have occurred, feeling that now is the time for me to step down gracefully."

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

March 03, 2026 05:54 ET (10:54 GMT)