Nidec Corp shares slump after auditor declines to sign off on earnings

Nidec Corp (TYO:6594) stock prices plummeted on Thursday, further plunging this week's losses after the company's auditor, PwC, decided not to endorse its delayed annual report. The shares plummeted up to 18% to 1,888.0 yen.

On Wednesday, Nidec unveiled its annual report for the fiscal year ending March 2026, revealing a significantly larger operating loss of 518.9 billion yen ($3 billion). This loss was primarily due to substantial impairment losses from its struggling electric motor business. The company recognized an impairment loss of 632 billion yen from its automotive and commercial products divisions.

PwC added a disclaimer to Nidec's report, indicating that the company was unable to gather sufficient evidence to form a proper opinion on the financial report. This further compounded Nidec's troubles, as the firm had been grappling with a tarnished reputation for months due to allegations of improper accounting and governance practices. An independent probe uncovered several instances of misconduct, such as concealing impairment losses and delaying the recognition of inventory depreciation.

Earlier this year, Nidec admitted to lapses in quality control. The firm acknowledged the existence of "material weaknesses in internal control" and vowed to implement various initiatives to address its governance and compliance issues. The Tokyo Stock Exchange requires Nidec to submit an internal control report by the end of October or face delisting.

In a separate development, Nidec announced that CEO Mitsuya Kishida abruptly resigned, with CTO Michio Kaida stepping in as the new CEO and president.