Nidec, a Japanese engine manufacturer, announced that it intends to present a plan to improve its internal management system to Japan Exchange Group (JPX) at the end of January 2026. The measure includes actions to prevent recurrences of accounting irregularities, even with the third-party committee investigation still ongoing and expected to extend beyond the end of 2025.
The company faces suspicions of inappropriate accounting practices at subsidiaries in China, Itália and other locations, with evidence of senior management involvement in arbitrary adjustments to asset valuations. The plan will be prepared in parallel with the external investigation, which analyzes the financial impact and the root causes of the problems.
JPX designated Nidec as a stock of special attention in October 2025, requiring governance improvements to avoid delisting risks.
Origin of accounting irregularities
The suspicions began in July 2025, when a subsidiary reported possible inappropriate handling of a supplier discount of around 2 billion yen in a Chinese unit. The internal investigation revealed documents suggesting intentional adjustments in the timing of reductions in the value of risky assets in several of the group’s units.
These signs point to possible management knowledge or involvement. Nidec installed an independent committee in September 2025, made up of external lawyers and accountants, to clarify facts, calculate impacts and propose preventions.
Recent financial impacts
In the first half of fiscal 2025 (April to September), the company recorded provisions and losses exceeding 876 billion yen related to cases under investigation or potentially linked. Auditor PwC issued an unqualified opinion for annual and semi-annual reports, citing a lack of sufficient evidence due to the ongoing investigation.
The company withdrew annual forecasts, suspended interim dividends and canceled share buybacks. Ações fell significantly following disclosures, reflecting investor concerns about transparency.
Improvement plan structure
Nidec created an internal corporate regeneration committee in October 2025, led by the president, with subcommittees focused on accounting, governance, human resources and compliance. The plan for JPX will include organizational culture reforms, prioritizing compliance over short-term goals.
- Review of performance evaluation systems to reduce pressure for immediate results.
- Strengthening internal controls in finance and consolidated reporting.
- Improved communication of information between global units.
- Mandatory training in ethics and accounting standards for all levels.
The company plans to submit a preliminary draft in mid-December 2025 and a final version in January 2026.
Parallel governance measures
Nidec implemented immediate actions, such as messages from management emphasizing compliance and suspending acquisitions to focus on internal corrections.
The third-party committee is expected to deliver a report in 2026, allowing for later adjustments to the plan. The company committed to full cooperation to restore shareholder and regulatory confidence.
Established regulatory schedule
JPX requires confirmation of improvements by October 2026 to remove special attention designation. Nidec set clear goals: plan submission in January and organizational progress report by the deadline.
These steps aim to normalize financial operations and reporting. The company maintains regular commercial activities, without interruptions in supply or production.
Developments in external research
The independent committee advances in the analysis of documents and interviews, covering cases in China (undue discounts), Itália (customs issues) and possible inadequate tax declarations in other units. Final Resultados will influence corrections to past financial statements.
Management recognizes the need for profound changes in the culture, previously focused on aggressive growth.
Current market position
Despite the challenges, Nidec maintains global leadership in precision motors for electric and electronic vehicles. Bancos principals have established additional lines of credit for operational support.
The company reaffirms its commitment to total transparency during the recovery process.
