Key facts
- Nidec appointed Michio Kaida as its new president and CEO.
- An investigation confirmed 844 cases of misconduct at Nidec, including falsified quality data.
- The company faces potential delisting if internal controls are not improved by the end of October.
- Nidec reported a net loss of over 564 billion yen ($3.6 billion) for fiscal 2025.
- Founder Shigenobu Nagamori's authority and pressure for cost-cutting were cited as root causes for misconduct.
Nidec has appointed Michio Kaida as its new president and CEO, tasking him with leading the company's recovery after a significant accounting and product quality scandal. The company is currently on the brink of delisting from the Tokyo Stock Exchange if it cannot demonstrate a credible path to fixing its internal controls by the end of October.
An independent investigation uncovered 844 cases of misconduct, including unauthorized alterations to materials and manufacturing processes, as well as falsified and fabricated test results. Sixty of these cases were classified as "Significant Quality Assurance Cases" that could involve legal violations. The panel traced the misconduct to the concentration of authority in founder Shigenobu Nagamori's hands, coupled with intense pressure for short-term performance and cost-cutting.
Nagamori has not publicly addressed the scandals. Current President Mitsuya Kishida stated that the responsibility to explain lies with him. Investigators found no direct evidence that Nagamori ordered the wrongdoing, but both the accounting and quality scandals stemmed from excessive pressure from him and other executives. The misconduct dates back to 2012, with employees accepting the practices as unavoidable due to pressure over delivery deadlines, sales, profits, or cost reductions.
Nidec insists there is no safety risk, but the company's pattern of falsifying quality data has eroded customer trust. The company posted a massive net loss of over 564 billion yen ($3.6 billion) for fiscal 2025. Its auditor, PwC Japan, declined to give an opinion on Nidec's latest financial report, citing the continued involvement of some Nidec officials implicated in accounting irregularities in the financial reporting process. Kaida has vowed to rebuild the company and restore trust by returning to its roots of manufacturing, people development, and quality.