Committee findings in NIDEC's automotive and appliance businesses

analysisThe company-appointed committee found that for fiscal 2024 (year ended 31 March 2025) AMEC avoided impairing its traction motor business's fixed assets, book value about ¥14.6 billion, by keeping three doubtful projects in the impairment-test sales plan: Project A, traction motor systems for an electric-vehicle maker to be produced by Guangzhou Nidec Auto Drive System Co., Ltd. (GNAD), which the Traction Business Unit itself judged unlikely around March 2025; Project B, already lost; and Project C, for which the unit's sales department saw no prospect of orders. A late-February 2025 report to the headquarters CFO and CPO set an 'impairment avoidance plan' of ¥35.14 billion for fiscal 2025 sales against an 'execution plan' of ¥24.1 billion, and after a 25 March 2025 report drew no specific objection from them, PwC Japan was given a plan with these projects without being told that Project A was unlikely or Project B lost. NIDEC booked an impairment of about ¥6.6 billion on these assets in its first-quarter fiscal 2025 consolidated statements, released on 14 November 2025; the committee says a fiscal 2024 test without the projects would have required about ¥8.6 billion, setting a carrying amount of about ¥10.1 billion (the ¥14.6 billion book value after IFRS adjustments) against a fair value of about ¥1.4 billion. The fiscal 2024 figures restated in NIDEC's annual securities report for the year ended 31 March 2026 include a ¥19,490 million impairment of fixed assets of the AMEC segment's EV traction motor and BSG businesses, attributed there to continued operating losses. The managers are not named; the finding, made without compulsory powers, is not a court or regulatory decision. ^{1 2}

analysisThe committee made a parallel finding for the inverter business. The fiscal 2024 impairment test for AMEC's inverter business kept in the sales plan 'Product B', an inverter under a June 2021 project agreement between Nidec Elesys Corporation (NESJ) and a customer, although the customer had asked in December 2024 to halt its development and the two had agreed in February 2025 to discontinue it; NIDEC thereby avoided an impairment loss and recognised no provision for contract losses. In May 2025 the general manager of the management department of AMEC's inverter business unit, also general manager of NESJ's accounting department, and headquarters Accounting Department staff set a policy to 'discuss matters on the assumption that Product B is still in production, use June 2024 figures for quantities and other metrics, and avoid any negative comments', and gave PwC Japan a combined profit-and-loss plan from June 2024 without telling it of the discontinuation. The staff, who are not named, told the committee they feared an impairment decision would force AMEC employees to work around the clock to meet targets, and so told PwC Japan that Product B sales would continue. NIDEC recorded a ¥24.3 billion impairment loss and a ¥35.9 billion provision for contract losses for inverter Products A and B in its first-quarter fiscal 2025 consolidated statements, released on 14 November 2025, whereas the committee found that about ¥21 billion and about ¥43 billion respectively should have been recorded in the third quarter of fiscal 2024 (October–December 2024); that is its finding, not a court or regulatory decision. ¹

analysisAt the Mexico plant of the AMEC Organic Business, a contract manufacturer for the US subsidiary Nidec Automotive Motor Americas LLC (the report calls the two companies together 'NAMA'), receivables of US$29 million outstanding for more than a year remained unresolved without an allowance, the committee found, although NIDEC's accounting policy requires a full allowance for receivables over a year overdue unless they are collectable. Headquarters management became aware of the issue in March 2024, when Hiroshi Kobe noted US$20 million of overdue receivables in credit-line materials; the report describes Kobe as chairman at that time, but NIDEC's notice of 14 February 2024 shows him as representative director, president and chief operating officer until 1 April 2024, when he became director and chairman. After an investigation by the internal audit department of NAMA's parent, Nidec Americas Holding Corporation (NAHC), US$32 million was reported in June 2024 at a briefing attended by Kobe and Mitsuya Kishida, and in August 2024 the headquarters deputy CFO found US$32.1 million overdue, US$16.3 million of it uncollectible, and reported this to Kishida, Kobe and the headquarters CFO. The committee, whose interim findings are not court or regulatory decisions, said it was still investigating the causes. ^{1 2}

analysisAccording to the committee, in early February 2025 Kishida, the headquarters CFO and the CPO decided to reach the announced fiscal 2024 operating profit of ¥240 billion through normal operations while handling separately about ¥24.7 billion of AMEC Organic one-time loss risks, including US$15.9 million of NAMA's non-performing receivables. At a meeting on 24 March 2025 Nagamori, insisting on 'self-funding', did not approve separate handling, and the minutes record him saying operating profit must not fall below ¥240 billion 'even by 1 yen'. A report to the NKK meeting (the weekly meeting of Nagamori, Kobe and Kishida) of 31 March 2025 cut fiscal 2024 'legacy liability' disposals to ¥3.5 billion, covered by ¥3.7 billion of 'recovery measures' such as land sales; NAMA's receivables were left out and no allowance was recorded in fiscal 2024 or fiscal 2025. The headquarters CFO told the committee that ¥240 billion was the top priority, so the scope was narrowed and the allowance, though recognised as needed, deferred; Kishida said he had been told the receivables were hard to collect but, amid other AMEC Organic issues such as quality, had not paid them particular attention, had not expected items due for disposal to be left and should have scrutinised them personally. The committee found no facts that Kishida instructed, directed or condoned, or that Nagamori instructed or directed, the improper accounting; being informed of the receivables, as Kishida and Kobe were, is not itself a finding of involvement. Kobe, whom the report calls chairman at the time he asked for a collection plan in March 2024, was then representative director, president and chief operating officer according to NIDEC's notice of 14 February 2024, becoming director and chairman on 1 April 2024. ^{1 2}

analysisFrom around May 2022, the committee found, Nidec Techno Motor (Zhejiang) Co., Ltd. (NTMZ), a Chinese subsidiary of Nidec Techno Motor Corporation (NTMC), received 'special cooperation funds' from several suppliers on the premise that it would repay them through higher unit prices on later purchases, but recorded them as reductions in the cost of sales instead of liabilities, overstating its profits. Purchasing records put the funds at 65.3 million yuan; none were received in 2023 and receipts resumed in January 2024. From staff interviews and a report of 8 November 2022, the committee believes NTMZ's then Japanese general manager started the scheme in 2022 to meet targets; staff said NTMC's then president and the then general manager decided to resume it in 2024. NTMC's then president told the committee he did not clearly recall the January 2024 resumption but remembered approving the scheme in July 2024 to reach the first-quarter fiscal 2024 targets. None of them is named, the former general managers have retired and gave no interviews, and the findings are not a court or regulatory decision. ¹

analysisIn the second quarter of fiscal 2024 (July–September 2024) NTMZ falsely represented that such agreements had been reached with three suppliers, according to the committee's interim findings, which are not a court or regulatory decision. When the suppliers would not agree to pay a total of 10 million yuan, the then Japanese general manager, who is not named, had purchasing staff exchange with them in early October 2024 agreements dated 27 September 2024 providing for receipt and repayment of the funds together with agreements dated 8 October 2024 rescinding them. Only the September agreements went to the accounting department, which recorded a 10 million yuan reduction in the cost of sales, overstating profits by that amount. ¹

analysisThe practice came to light through a new NTMZ general manager. The committee's report states that the Japanese general manager who took office in November 2024 prepared a document titled 'Disposition of NTMZ Legacy Liabilities', stating a remaining balance of special cooperation funds of ¥488 million, and between mid- and late January after his appointment reported it to the Executive Officer Responsible for Group Companies and to Hiroshi Kobe, then also NTMZ's chairman. He also reported the issue to NTMC's internal audit office, which led to audits, an Audit and Supervisory Committee investigation with outside law firms, the discovery of group documents on 'legacy liabilities' and the establishment of the Third-Party Committee. Kobe's receipt of the report is not a finding of involvement, and the report makes no finding against him on this matter. ¹

analysisThe committee found that when NIDEC expected to fall ¥10 billion short of its fiscal 2021 (year ended 31 March 2022) operating profit target of ¥190 billion, it proposed booking as revenue about ¥1 billion of government grants for a subsidiary's planned EV-products factory in 'Country X', 'an idea that came from Mr. Nagamori'. Grants of about ¥1,250 million were recognised in full as revenue in March 2022, although in the committee's conclusion they were, as the local audit firm had said, grants related to assets. NIDEC relied on Jun Seki's approval on 11 May 2022 of the related capital investment as showing that future execution of the business was highly certain; at a board meeting on 4 June 2022 attended by Nagamori, a resolution on a ¥45 billion capital investment in the subsidiary was put on hold because the nature of the grants and the recovery of the capital increase were unclear. The report calls Seki representative director, president and CEO; NIDEC's annual securities report for the year ended 31 March 2022 lists him as chief executive officer from June 2021 and chief operating officer from April 2022. The committee found no facts that Seki instructed, directed or condoned improper accounting, and concluded overall that none showed Nagamori instructed or directed it; neither conclusion is a court decision. ^{1 2}

analysisThe grants, received in March and April 2022 by AMEC's foreign subsidiary, were booked in full as revenue as of 31 March 2022, the committee found, although the local audit firm told the subsidiary on 6 April 2022 that they should be treated as grants related to assets. To obtain a supplementary notice from the local government, sent on 11 May 2022 but dated 30 March 2022, NIDEC submitted a Letter of Consent dated 29 March 2022 stating that the notice would be used solely for its internal accounting purposes and that the investment agreement would not be amended; the general manager of headquarters' Accounting Department and others did not tell PwC Kyoto, which had taken over the audit of the grant transactions, that the letter had been submitted. The general manager told the committee he had hesitated about such a side letter, did not want to share it with PwC Kyoto and that 'looking back now, it was not the appropriate course of action'; PwC Japan said it first learned of the letter through the committee's questions and believes it would otherwise have concluded NIDEC's explanation was not reasonable. NIDEC's annual securities report for the year ended 31 March 2026 lists grants booked as revenue by misrepresenting their nature among the irregularities and states that it retroactively restated the misstatements. The report names neither the country, the subsidiary nor the general manager, and the finding is not a court or regulatory decision. ^{1 3}

analysisThe committee found that the executive officer responsible for group companies led the negotiations from the end of February 2022, without the subsidiary's involvement, and put the accounting general manager under intense pressure to book the grants as revenue. When Nagamori had the full-time Audit and Supervisory Committee members verify the facts, the officer forwarded the meeting minutes and supplementary notice but removed the Letter of Consent and the passage explaining it. He said he had 'no intention of concealing' the letter and wanted to make everything transparent and let the full-time members judge for themselves; reading the e-mail sequence rather than relying on any admission, the committee found this could not be trusted. The general manager had said he 'did not want to share it with PwC Kyoto' and that this was not appropriate, and PwC Japan that it learned of the letter only through the committee's questions and believes it would otherwise have found NIDEC's explanation not reasonable. The officer and staff are not named. The committee found no facts that Nagamori instructed or directed, or that Seki (whom NIDEC's annual securities report for the year ended 31 March 2022 lists as CEO from June 2021 and COO from April 2022) instructed, directed or condoned, the improper accounting; these findings are not a court or regulatory decision. ^{1 2}

analysisA separate grant was involved at Nidec GPM Hungary LLC (GPMH), which in fiscal 2022 recorded in its own statements a €4.9 million provision for possible repayment of a €4.9 million Hungarian government grant received in September 2020 on condition of €555 million of sales over eight years and an average workforce of 120. The committee found that, to meet performance targets, NIDEC headquarters' Accounting Department improperly reversed the provision in the consolidated statements for the fourth quarter of fiscal 2022 (January–March 2023): accounting staff, concerned that an unexpected €12.13 million impairment of capitalised development costs at Nidec GPM GmbH (NGPM) could hinder consolidated operating profit of ¥100 billion, disguised the reversal as part of a reversal of impairment losses on GPMH's tangible fixed assets to offset part of that impairment, and the supervisor approving the vouchers did not check them sufficiently. The staff are not named, and the finding is not a court or regulatory decision. NIDEC's annual securities report for the year ended 31 March 2026 lists this improper reversal of a subsidiary's grant-repayment provision among the irregularities and states that the misstatements were retroactively restated. ^{1 3}

analysisIn the third and fourth quarters of fiscal 2021 (October 2021–March 2022), the committee found, the Global Appliance (GA) business of NIDEC's Appliance, Commercial & Industrial Motor Business Unit (ACIM) issued 'Additional Invoices' to several customers to recover profit shortfalls caused by rising costs and booked them as revenue, while telling each customer that equivalent amounts would be deducted from future invoices or paid back as rebates, in effect a promise to return them; the improperly recognised revenue totalled US$22.5 million. In December 2021, with the approval of the GA CFO and those responsible for internal controls, one customer was promised deductions from future invoices (US$3.9 million recognised); from February to March 2022 seven customers received rebate letters signed by the GA deputy CFO, later CFO, covering US$18.6 million, two of them with the knowledge and approval of the GA CFO and the person responsible for internal controls. The committee sets this against a background in which, from around late November 2021, Shigenobu Nagamori repeatedly expressed strong concerns about GA performance and strongly demanded a recovery in operating profit. The GA officers are not named, and the finding is not a court or regulatory decision. ¹

analysisOf the receivables under the Additional Invoices still uncollected when the investigation began, allowances for doubtful accounts had been recorded for those of only two of the seven customers, the committee found. The GA business repeatedly revised and extended payment due dates in its system so that receivables more than 365 days past their original due dates appeared not to be overdue, avoiding the 100% allowance required by NIDEC's accounting policy manual (NIAP). The customer promised deductions paid the full invoiced amounts by November 2023, which the GA finance department booked as collections of receivables although they were in substance treated as funds for reducing future invoices; the other six customers' obligations were not collected. These are interim findings of the company-appointed committee, not a court or regulatory decision. ¹

analysisThe committee also examined a claim against Nidec PSA eMotors SAS (NPe), a joint venture of Nidec Leroy-Somer Holding and a customer within the Motion & Energy Business Unit (MOEN). After NPe's orders fell below 50% of estimated demand, a major supplier terminated their contract in October 2024 and claimed US$465.3 million in compensation. The claim was not in NPe's reporting package, there was no evidence that MOEN or headquarters considered the need for a note, and it was not reported to PwC Japan before the settlement. According to the committee, NPe contested the claims, regarded the amount as extremely high, unrealistic and likely to change significantly in negotiations, and recorded no provision because a reasonable amount could not be calculated before settlement, a judgment the committee said could not be called unreasonable. The committee concluded that NIDEC should at least have disclosed a contingent liability in its fiscal 2024 consolidated statements, but expressly did not classify the matter as improper accounting, treating it as revealing internal control issues. The parties settled on 1 November 2025 for a total of €137 million (an actual payment of €116 million after price revisions), and NIDEC recognised a liability of ¥19,001 million as a revised subsequent event in its first-quarter fiscal 2025 consolidated statements, released on 14 November 2025. ¹