Nidec panel finds Nagamori and 8 other ex-officers liable for 27.6bn yen in damage
In short
Nidec published a report on 20 October from its officer liability investigation committee, which found nine former officers, including founder Shigenobu Nagamori and five successive presidents, liable for damages over the company's accounting fraud. The report put the damage to the company at about 27.6 billion yen. Nidec said it will consider legal measures, including damages claims.
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Nidec published the report of its officer liability investigation committee on 20 October. The committee, set up after the company's accounting fraud problem, found nine former officers liable for damages. They include founder Shigenobu Nagamori and five successive presidents. The report put the damage to Nidec at about 27.6 billion yen, and the committee recognised a causal link between that damage and the nine. [ 3 , 4 , 6 , 7 , 9 , 10 , 11 ]
According to the report, the company adopted a wrong accounting policy across the group and put off dealing with a "negative legacy" of assets for years. Asahi said the policy was to process losses only within the range that did not hinder achieving performance targets. The committee said this reversed the basic principle of accounting, under which the profit figure is set after the necessary losses are fixed. Kyodo, Sankei, Mainichi and Yomiuri said Nagamori and Hiroshi Obe (小部博志), a founding member and former president, held this mistaken view, and that other presidents and auditors did not correct it. [ 4 , 5 , 7 , 9 , 11 ]
Yomiuri said the nine are five presidents, former chief financial officers and former full-time auditors. Mitsuya Kishida (岸田光哉), who resigned as president effective 29 September over improper statements on financial reporting, was found to have known that a false explanation was given to the auditing firm and to have taken no measures to avoid or correct improper accounting. Former presidents Hiroyuki Yoshimoto (吉本浩之) and Jun Seki (関潤) and two former full-time auditors were found to have been in a position to notice improper accounting but did not correct it. Kyodo said Nagamori and Obe failed in their duties in most of the cases examined. [ 4 , 11 ]
Mainichi said the damage included about 22.2 billion yen in investigation costs and about 5.3 billion yen in audit costs. Yomiuri said it covered investigation costs, securities report correction costs and a listing penalty. Kyodo, Sankei and Mainichi said the committee found each person's share of the damage hard to determine and said it should await a court's decision. TBS said the damage should be judged according to each person's degree of contribution. Nippon TV said Nidec booked a 632.1 billion yen impairment loss in the last fiscal year. [ 4 , 5 , 6 , 7 , 10 , 11 ]
Nidec said it will consider necessary legal measures, including damages claims, and respond promptly. Mainichi said the company has not finished correcting its 2022-25 securities reports and will move quickly on a lawsuit afterwards. Nidec is designated a special alert stock by the Tokyo Stock Exchange. Yomiuri said it could face delisting if it cannot show by the end of the month how it will improve internal management, and that several shareholders have sent demands asking the company to sue current and former officers. [ 6 , 7 , 11 ]
Why it matters
Outlets note that Nidec is a Tokyo Stock Exchange "special alert" stock and must show by the end of the month how it will improve internal controls or risk delisting. Yomiuri says legal action against the nine would make clear the company's break with its former management.
Key facts
- On 20 October Nidec published the report of its officer liability investigation committee, set up after the accounting fraud problem. [ 3 , 4 , 5 , 6 , 7 , 9 , 10 , 11 ]
- The committee found nine former officers liable for damages, including founder Shigenobu Nagamori and five successive presidents. [ 3 , 4 , 5 , 6 , 7 , 9 , 10 , 11 ]
- Damage to the company was put at about 27.6 billion yen, mainly investigation costs. [ 3 , 4 , 6 , 9 , 10 , 11 ]
- The report said the company's accounting policy allowed losses to be processed only within the range where performance targets were met, which it called a reversal of basic accounting principles. [ 4 , 6 , 7 , 9 , 11 ]
- The committee found it hard to determine each person's share of the damage and said a court should decide. [ 4 , 5 , 7 ]
- Nidec said it will consider legal measures, including damages claims, against the nine. [ 4 , 6 , 10 , 11 ]
Confirmed by several sources
- Nidec's officer liability investigation committee found nine former officers, including founder Shigenobu Nagamori and five successive presidents, liable for damages. [ 3 , 6 , 7 , 9 , 10 , 11 ]
- The damage to Nidec was put at about 27.6 billion yen, and the committee recognised a causal link between the officers' failures and that damage. [ 3 , 4 , 6 , 7 , 9 , 11 ]
- Nidec is considering legal measures, including damages claims, against the former officers. [ 4 , 6 , 10 , 11 ]
- The committee said the company's policy of handling its accumulated losses only within the range where performance targets were achieved reversed the basic principle of accounting. [ 4 , 6 , 7 , 9 , 11 ]
Still unclear
- Whether Nidec will actually sue the nine former officers. Documents say only that the company is considering legal measures; Mainichi says it will act after correcting its 2022-25 securities reports.
- How the damage is divided among the nine. Kyodo (Tokyo Shimbun), Sankei and Mainichi say the committee found each person's share hard to determine and left it to a court, while TBS says the damage should be judged according to each person's degree of contribution.
- Whether Nidec keeps its Tokyo Stock Exchange listing. Mainichi and Yomiuri say Nidec's improvement plan, due by the end of October, will be reviewed; no outcome is reported.
What local media are saying
Timeline, local time
- NHK reported the investigation results on 20 October. [ 1 ]
- Nikkei reported that the committee found five successive presidents liable. [ 3 ]
- Kyodo News, carried by Tokyo Shimbun, reported the findings and the 27.6 billion yen damage. [ 4 ]
- Yomiuri reported that Nidec will consider legal action including a lawsuit, on 21 October. [ 11 ]