Nidec’s stock plunged sharply after revealing an accounting scandal involving its Chinese operations. The company created an independent investigative panel and faced sweeping investor backlash. On September 4, 2025, shares of Nidec dropped as much as 22.5 percent — the steepest one‑day fall in its history. The move followed disclosure of a probe into possible improper accounting practices at one of its subsidiaries. The slide drew sharp attention to governance risks at the Japanese electronics firm.
The issue stems from Nidec’s internal audit of its unit in China, Nidec Techno Motor. That review flagged a lump‑sum payment made in September 2024 that raised red flags. Documents uncovered in the internal probe suggested that not only Techno, but group companies and possibly senior management, may have been involved. This triggered the establishment of a third‑party committee to dig deeper.
Before the plunge, Nidec had already delayed submission of its annual report. The reason: suspected errors in country-of-origin declarations for motors made by its Italian subsidiary. That delay worsened investor unease. In earlier years, Nidec also revised down two years of operating profits after finding inflated sales in a subsidiary.
Nidec is a global leader in motor components, supplying parts for electric vehicles, consumer electronics, and industrial machinery. Its broad footprint across China, Europe, and elsewhere adds complexity to oversight and controls. The group’s founder and chairman, Shigenobu Nagamori, has long held strong influence over company direction.
Market analysts reacted swiftly. One noted that the share loss reflects renewed investor concern about Nidec’s internal controls and management transparency. Another warned that the full impact may extend beyond this subsidiary. Many investors now question whether additional irregularities may surface.
Regulators and shareholders will watch the third‑party committee closely. Its mandate includes verifying facts, assessing financial damage, and proposing preventive measures. Meanwhile, Nidec pledged full cooperation and timely disclosure of material findings. The wider implications are significant. This accounting scandal shakes confidence not only in Nidec but in Japan’s broader corporate governance environment. It fuels calls for stricter oversight, greater audit independence, and clearer separation between management and board influence.
For Nidec itself, recovery will depend on its ability to restore trust. It must strengthen controls, transparency, and internal audits. It may also overhaul leadership processes and enhance checks on cross‑border operations. Looking ahead, the committee’s findings could lead to legal or regulatory sanctions, restatement of earnings, or even management shakeups. For now, Nidec faces intense scrutiny from investors, regulators, and partners. Its next moves will determine whether it can weather this crisis or suffer long-term reputational damage.
