Corporate Corral

Nidec in damage-control mode over accounting scandal

Nidec Corp. — the Japanese company that sometimes calls itself “the world's leading comprehensive electric motor manufacturer” — on March 13 announced the formation of an Executive Responsibility Investigation Committee to determine which current and former directors, auditors, and executive officers bear personal legal liability for an accounting scandal that has shaken the company to its foundations, writes Kevin Jones, EA Senior Editor (look fo more in the April issue of EA.)

The announcement was the latest development in a crisis that has been ongoing since at least the spring of 2024, when a seemingly routine financial correction opened a window onto something more troubling.

Inside a Nidec facility.-Nidec Industrial photo

Hints of the scandal first came to public attention with a document bearing the inauspicious title “Amendment Report on Quarterly Report,” which Nidec filed in May 2024. By September 2024, a payment of approximately 200 million yen — roughly $1.4 million — at a Chinese subsidiary triggered a deeper internal investigation, and documents emerged suggesting that “the company and its group companies could have engaged in improper accounting with the involvement or knowledge of its or their management,” according to an account released by Nidec last Sept. 3. The practice under scrutiny involved the arbitrary manipulation of the timing of asset write-downs — in effect, deferring the recognition of losses to make quarterly results look better than they were. The problem, it turned out, was not isolated to one subsidiary or one country.

According to Nidec’s overview of the scandal, investigators confirmed misconduct across many of the company’s global business bases. This misconduct included the improper avoidance of inventory valuation losses, the capitalization of personnel costs that should have been expensed, fictitious recognition of subsidies as revenue, and the understatement of allowances for bad debts. In January 2026, Nidec’s own presentation materials attributed the misconduct to “excessive management focus to demonstrate continued growth” and “a corporate culture that gives top priority to short-term profits and does not allow targets to be missed.”