Nidec says considering legal action against executives over accounting scandal

Nidec Corporation is contemplating legal action against former and current executives in relation to a prolonged accounting scandal, according to the company's announcement on Friday. The Japanese electric motor manufacturer is at risk of being de-listed from the Tokyo Stock Exchange due to the scandal. Nidec has established an independent committee to investigate the matter and determine if the implicated executives are legally liable.

The company intends to discuss the findings of this investigation and any potential legal actions in a board meeting and an audit and supervisory committee meeting on Friday. Nidec's shares experienced a decline of 0.9% on Friday, marking a 14% decrease so far this year, following the disclosure of a significant impairment in its fiscal 2025 earnings, effectively erasing its profits accumulated over the past decade.

The scandal emerged in late 2025 when Nidec disclosed suspicions of improper accounting practices involving its top management, which involved deferring asset write-downs to inflate earnings. The company subsequently conducted a lengthy investigation, overseen by the independent committee, which uncovered additional instances of accounting irregularities and misconduct.

The Tokyo Stock Exchange had previously placed Nidec under special monitoring, potentially leading to its removal from the exchange. The ongoing investigation has caused a significant decline in Nidec's status, which was once a cornerstone of the global electric motor supply chain, supplying key automakers such as BMW and Tesla.