---
title: "Earlier detections and internal investigations at NIDEC, 2017–2024"
language: en
canonical: https://dossiertwist.com/dossiers/nidec/earlier-investigations/
as_of: 2026-10-06
keywords: ["NIDEC","Nidec Corporation","Shigenobu Nagamori","Mitsuya Kishida","Hiroshi Kobe","Michio Kaida","Third-Party Committee","improper accounting","PwC Japan","disclaimer of opinion","Securities on Special Alert","Tokyo Stock Exchange","legacy liabilities","special audits","quality misconduct","derivative suit","Nidec Drive Technology","Nidec Precision","Oasis Management","Nidec Components"]
---

# Earlier detections and internal investigations at NIDEC, 2017–2024

**Question.** What improper accounting did NIDEC detect before 2025, and how were those cases investigated and handled?

**Answer.** Before 2025 NIDEC detected improper accounting at several group companies through its own special investigations, whistleblowing and auditor queries, but, according to the Third-Party Committee, such cases were not made public and some were classed as errors or attributed mainly to local managers. The committee found that a 2018 allowance reversal at ACIM was called an 'error', that the 2019 outside law-firm investigation was not completely independent and reported without interviewing Hiroyuki Yoshimoto, and that internal investigations at Nidec Servo (2020) and Nidec GPM (2021–2022) did not identify headquarters performance pressure as a cause, in the Nidec Servo case after statements were deleted from interview minutes. These are findings of the company-appointed committee, which found no facts that Yoshimoto instructed, directed or condoned the improper accounting it uncovered.

## Special investigations and early warnings, 2015–2018

- Analysis: NIDEC's Corporate Administration & Internal Audit Department counted the instances of improper accounting it specially investigated from fiscal 2015 to the first half of fiscal 2018, the committee's report records. As an example the report gives the first half of fiscal 2017 (April–September 2017), when it was found that Nidec Sole Motor Hungary K.F.T. (NSMH), in the Appliance, Commercial & Industrial Motor Business Unit (ACIM), had significantly extended the useful life of fixed assets without approval from headquarters' Accounting Department, and that the Japanese CEO and the local German CFO of Nidec GPM GmbH (NGPM), in AMEC, had capitalised development and related costs without sufficient supporting documents. The individuals are not named, and the committee notes that such earlier instances were not made public. [src-004]
- Analysis: Allegations also reached Nagamori directly. The committee's forensic review found a July 2018 e-mail in which Shigenobu Nagamori told Hiroshi Kobe that six letters alleged manipulative accounting at the former GMS department of the small-motor business and that an audit should be conducted immediately. Kobe replied that, under the push to increase sales, not only GMS but other business units and group companies engaged in 'advance sale' (premature sales recognition), including practices in 'a gray area', and that in businesses with many models treatment sometimes deviated from proper practice. The report cites the exchange as evidence that letters alleging improper accounting reached Nagamori and draws no separate finding about Kobe from it. [src-004]

## ACIM's allowance reversals: an 'error' in 2018

- Analysis: The committee's report describes how in October 2018, after a foreign executive in the US objected to changing the estimation method, NIDEC headquarters' Accounting Department recorded, at the request of ACIM's executive general manager, consolidated journal entries reversing ACIM's allowances for inventory valuation and doubtful accounts for the second quarter of fiscal 2018 (July–September 2018), and the headquarters CFO signed a letter changing the allowance standards without confirming that there was reasonable cause. After PwC Kyoto said on 26 October 2018 that it was concerned about ACIM's Japanese management overriding internal controls, the Corporate Administration & Internal Audit Department reported on 12 November 2018 that the matter was an 'error' rather than an intended improper adjustment and that no similar instances were found, and PwC Kyoto issued an unqualified review conclusion. A person involved told the committee there had been 'a desire to reach the conclusion that the matter constituted an error rather than misconduct, if possible', to avoid an outside-attorney investigation delaying the closing, and that in hindsight the facts indicated that internal controls had been overridden. This is the committee's assessment, based on interviews, of a 2018 internal investigation; the executives are not named, and it is not a court or regulatory decision. [src-004]

## The 2019 outside law-firm investigation

- Analysis: According to the committee's report, in December 2018 a person responsible for internal audit at Nidec Americas Holding Corporation (NAHC) told PwC U.S. that surplus inventory at AMEC's Mexico site might have been improperly valued, after which NIDEC's Board of Corporate Auditors commissioned an outside law firm. Its report of 28 March 2019 on the US businesses of ACIM and AMEC and on NIDEC listed 11 problematic instances, including improper reversals of ACIM allowances for inventory and doubtful accounts in the second quarter of fiscal 2018 (US$17 million), of ACIM bonus allowances (US$4.2 million) and of ACIM litigation-loss and warranty allowances (US$14 million); AMEC sales and receivables booked from August to December 2018 for Chinese import duties that customers had not agreed to bear (US$4.3 million); the headquarters Accounting Department's rejection of an ACIM impairment proposal without proper consideration of the accounting basis; and a possible deferral of expenses by ACIM's GA business (US$9.5 million). These are the 2019 investigation's findings as summarised by the committee; the persons involved are not named, the cases were not made public at the time, and none of this is a court or regulatory decision. [src-004]
- Analysis: The committee called the law firm, which it does not name, 'not completely independent', because the scope was set in discussions with the executive officer then responsible for internal audit. The firm shared 50 representative e-mails ('Latent Issues') suggesting similar problems elsewhere, including e-mails on the Asset Revitalization Project and the special audits. A draft list given to PwC Kyoto put legacy liabilities needing immediate treatment at about ¥6.3 billion as of the third quarter of fiscal 2018 and said intentional misconduct could not be ruled out for a considerable number; seven instances (estimated impact ¥1.066 billion) were corrected, but NIDEC did not later confirm whether the items marked 'intentional' resulted from intentional misconduct and gave PwC Kyoto no particular explanation of the special audits. At its fiscal 2018 full-year results NIDEC concluded that the issues had an impact of less than 5% on profit before income taxes and net profit and did not require corrections to past consolidated financial statements, and PwC Kyoto issued an unqualified opinion on that year; according to the committee, a series of further instances of improper accounting was discovered after the 2019 investigation. [src-004]
- Analysis: According to the committee, the instances the law firm found in 2019 included cases in which ACIM's executive general manager was directly involved in the misconduct, cases in which NIDEC's headquarters CFO was found to be involved and cases in which Hiroyuki Yoshimoto, then representative director and president, was suspected to be involved; the law firm's report cited an e-mail referring to 'the instruction of EVP Yoshimoto to fill the remaining shortfall using OBS'. The firm reported this suspicion in early March 2019, yet completed its 28 March 2019 report without interviewing Yoshimoto or forensically reviewing his e-mails, so no definitive findings were made about him; an Internal Audit Department participant told the committee there had been 'a shared understanding that no harm could be done to Mr. Yoshimoto'. He was interviewed on 8 May 2019 only after a US certified public accountant supporting PwC Kyoto's quality management raised doubts; the minutes were read aloud to PwC rather than provided, and the firm told the Board of Corporate Auditors that nothing had been found requiring changes to its report. Yoshimoto later told the Third-Party Committee that he had instructed the allowance reversals, which he regarded as acceptable 'aggressive' accounting, and had not been aware that deferring expenses was unacceptable; the committee found no objective evidence disproving this. The 2019 suspicion is not a finding against him, the other persons are not named, and the committee found no facts that he instructed, directed or condoned the improper accounting discovered in its own investigation. [src-004]
- Analysis: Yoshimoto also acknowledged to the committee that he had instructed ACIM's executive general manager and others to reverse the allowances examined in 2019 and had been shown the amounts of expenses ACIM's local management was deferring, and said that Nagamori strongly demanded ACIM's short-term targets and that the fiscal 2018 business plan was unrealistic. The committee believed that, in the background, Nagamori exerted strong pressure on Yoshimoto to achieve ACIM's targets and that Yoshimoto in turn gave strict instructions to ACIM's executive general manager, who told the committee he led the accounting later judged inappropriate because Yoshimoto had strongly instructed him to improve operating profit in the second quarter of fiscal 2018 (July–September 2018). The committee found no objective evidence disproving Yoshimoto's explanation that he saw the reversals as acceptable 'aggressive' accounting and did not know that deferring expenses was unacceptable, and no facts that he instructed, directed or condoned the improper accounting found in its own voluntary investigation, which is not a court decision. [src-004]
- Analysis: The committee found that after the 2019 investigation NIDEC sent accounting notices on 28 February and 25 March 2019, circulated on 27 March 2019 a top-management message from Nagamori stating that 'not achieving the performance targets is acceptable if achieving or surpassing the business plan requires misconduct', and created the chief performance officer post, but carried out no specific measures on the law firm's recommendations to evaluate bottom-up targets, revise targets flexibly, use targets and KPIs unaffected by financial-accounting operating profit and make the pressure to achieve targets more reasonable. A planned direct reporting line from subsidiary CFOs and CPOs to headquarters was not realised, which the responsible former executive officer attributed to a lack of personnel at the subsidiaries. This is the committee's assessment, not a regulatory finding. [src-004]
- Analysis: In the first half of fiscal 2019 (April–September 2019), when a fictitious inventory overage at an ACIM subsidiary was to be corrected, the headquarters CFO asked that the resulting loss be recovered in the second half, and the general manager of the headquarters Accounting Department, without the consent of ACIM's executive general manager, added a handwritten note in that executive's name to the consultation document for Nagamori promising to recover a €7 million shortfall from the third quarter, in order to obtain Nagamori's approval, the committee found. The then general manager told the committee that Nagamori 'never would have approved recognition of the losses without the promise to recover the recorded losses', so with no time before the results announcement he used the executive's name. The finding rests largely on his own account, and the people involved are not named. [src-004]

## Nidec Servo, 2020: interview minutes and the e-mail review

- Analysis: According to the committee's report, from February to around May 2020 NIDEC's Corporate Administration & Internal Audit Department investigated Nidec Servo Corporation (NSRV, now Nidec Advanced Motor Corporation) with PwC Kyoto, after a whistleblowing report sent to PwC Kyoto. It found that NSRV executives, under performance pressure, had recorded fictitious sales and sales presuming later reversal through distributors, double-counted inventory, recognised sales early, deferred expenses and lowered allowances to meet targets. Its report of 30 March 2020 to the Board of Corporate Auditors blamed NSRV's executives and insufficient guidance from headquarters but did not mention performance pressure from headquarters executives, although interviewees had described strong pressure from the executive officer responsible for group companies; the committee found such statements had been deleted from the finalised interview minutes. An employee then in the department told the committee of having understood that a fundamental cause was that officer's excessive pressure but feeling that indisputable evidence would be needed to challenge him. PwC Japan told the committee that its engagement partner had revised the minutes directly, given the time constraints, because they appeared inconsistent with explanations in daily calls that the actions had been taken to meet targets set by NSRV itself. A PwC Kyoto partner's e-mail of the time refers to interviews with 'the four people who were dismissed'. The individuals are not named, the case was not made public, and the committee's account is not a court or regulatory decision. [src-004]
- Analysis: The committee found that the deletions followed comments by the PwC Kyoto engagement partner, and that an employee said he feared repercussions because Nagamori liked the officer. When PwC Kyoto asked for a forensic review of the e-mails of Hiroshi Kobe, then also NSRV's part-time representative director and chairperson, and of the executive officer, the department concluded after a review from April to May 2020 that neither gave instructions for or received reports of improper accounting; but it had arbitrarily selected the e-mails given to PwC Kyoto, excluding asset-revitalisation, internal-audit and special-audit matters, which cut Kobe's examined e-mails from 56 (one problematic) to 37 (none problematic). The finding concerns how the department conducted and reported the review and does not state that Kobe gave instructions for improper accounting. Describing matters it could confirm in a short time, PwC Japan added that the engagement partner, who had revised the minutes under time constraints to confirm a discrepancy with explanations given in daily calls, had told the corporate auditors that digital forensics were needed to confirm there was no inappropriate or excessive pressure from headquarters. NIDEC's annual securities report for the year ended 31 March 2026 states that it has built a structure, including regular reporting by the Internal Audit Department to the Audit and Supervisory Committee, so that practices such as deleting parts of interview minutes are never repeated. [src-004] [src-003]
- Analysis: The NSRV case also raised suspicions about Mr. A, the general manager in charge of special audits, who was also a non-full-time corporate auditor of NSRV: that he had known since September 2018 of practices such as recording sales presuming later reversal without correcting them, and had told NSRV executives to destroy documents just before the internal audit. Mr. A denied all the suspicions during the internal investigation. They were not confirmed, but he received a formal written warning for failing to detect misconduct as corporate auditor. On 1 September 2020 his title was changed to executive consultant and his remuneration cut by 40%; no evidence was found that he carried out special audits after that, and he left NIDEC in June 2022. The report does not name him. [src-004]
- Analysis: In the 2020 forensic review of headquarters executives' e-mails, NIDEC's internal audit department found an e-mail forwarding to the executive officer responsible for group companies a weekly report from Mr. A to the chairperson. It gave updates from September 2019 on inflated inventory, fictitious sales and the amount of improprieties in prior years at Sankyo Precision Indonesia (NSPI), in connection with its 'legacy liabilities', and stated that these matters had not been found by internal and outside audits and that there had been an attempt to avoid a 'KAC' audit. Internal audit staff discussed treating it not as a 'problematic email' but as one of the 'examined emails'. The committee describes the e-mail's contents without further detailing the NSPI matters, and the report does not name Mr. A or the executive officer. [src-004]

## Nidec GPM, 2021–2022: the CEO's instructions and headquarters pressure

- Analysis: In November 2021 NGPM's CFO told PwC Germany that accounting errors it had pointed out followed the Japanese CEO's instructions. The resulting investigation by NIDEC's internal audit and legal & compliance departments found that the failure to record a €2.13 million inventory write-down and the capitalisation of incurred expenses noted by PwC Germany in the fourth quarter of fiscal 2020 were improper accounting carried out on the CEO's instructions, and that he also instructed improper failure to record write-downs of €465,000, capitalisation of €710,000 of expenses and inappropriate revenue recognition of €2 million; the early recognition of reimbursement claims was also improper but without intent. In the March 2022 report the CEO said he had felt strong pressure from his superior, AMEC's deputy executive general manager and CFO, and he had told a finance director by e-mail that he was 'fully aware what I did was improper accounting'. That superior said he did not give instructions to the degree of carrying out improper accounting, and the report found no evidence that he did. It attributed the main cause to the Japanese CEO's management attitude, which prioritised the superficial alignment of figures over the accounting basis, and pointed out only that AMEC's monitoring was insufficient; an internal-audit e-mail of the time referred to the CEO as 'quitting'. The committee, whose account is not a court decision and which does not name the individuals, criticises the report for treating headquarters' performance pressure as no problem at all. [src-004]
- Analysis: From e-mails of January 2022, the committee found that the Internal Audit Department feared that recognising performance pressure would broaden the investigation and point to deficient company-wide controls, and that 'it appears that efforts were made not to reach this conclusion'. That is the committee's reading of internal e-mails, not a finding of intent against any named person. [src-004]

## Nidec Global Appliance Brasil, 2022

- Analysis: As background, the committee's report notes that in 2019 NIDEC acquired the compressor business of the US company Whirlpool Corporation, buying the shares of several subsidiaries in that business, including Embraco Industria de Compressores e Solucoes em Refrigeracao Ltda. (Embraco Brasil), which reinforced its refrigeration compressor business. In March 2022 a whistleblowing report to PwC Brazil and NIDEC's compliance hotlines alleged that, on instructions from top management, Nidec Global Appliance Brasil Ltda. (NGAB), part of ACIM's Global Appliance business, had improperly reversed inventory and quality allowances, adjusted expenses and recognised revenue without basis in the fiscal 2021 closing. The internal audit department's report of 13 May 2022, prepared with a forensic review by an outside expert at PwC Kyoto's request, confirmed that the accounting was done as described but treated it as concerning management-accounting figures only, found two instances of improper accounting in the financial report that it did not regard as intentional, and found no improper revenue from the GA business's additional invoices because the rebate letters and price-reduction e-mails were not found; PwC Kyoto accepted the results and issued an unqualified opinion on the fiscal 2021 statements. In its own investigation the committee found that those additional invoices had led to US$22.5 million of improperly recognised revenue. The allegation and the 2022 conclusions are as the committee summarises them, not a court or regulatory decision. [src-004]
- Analysis: The committee found that PwC Kyoto was made, 'per Mr. Nagamori's instructions', to bear half of the forensic review's cost of about ¥51.4 million: Nagamori wrote on the approval request of 8 June 2022 'Negotiate to have Kyoto Audit Corporation cover half', PwC Kyoto reduced its audit fees for fiscal 2021 (year ended 31 March 2022) and fiscal 2022 by ¥12.85 million each (¥25.7 million in total), and Nagamori commented that this would be 'a good warning' to PwC Kyoto 'to prevent poorly considered instructions in the future'. Staff told the committee they felt uncomfortable making the audit firm bear the costs but followed Nagamori's instructions. PwC Japan told the committee that PwC Kyoto regarded the forensic costs as part of the audit-fee negotiations and agreed to cover them taking into account the remuneration for the group audit as a whole. [src-004]

## SPMS sales in China, 2023–2024

- Analysis: An investigation by NIDEC's internal audit and legal & compliance departments (report of 10 May 2024), which followed an internal SPMS investigation in January 2024 and a whistleblowing report, found that the deputy general manager of the Small Platform Motor & Solutions (SPMS) sales division, also vice-chairman of Nidec (Shenzhen) Co., Ltd. (NCHZ) and Nidec (Shanghai) Co., Ltd. (NCHS), instructed NCHZ's general manager in April 2023 to recognise sales for products not yet shipped and without customers' agreement, and that similar sales recognised by his subordinates at NCHS were not corrected, in order to achieve the sales plan. Excess sales in the first to fourth quarters of fiscal 2022 totalled about ¥6.248 billion, with an operating-profit impact of about ¥694 million. The vice-chairman admitted giving the instructions and said he had felt strong pressure from the executive officer serving as SPMS's executive general manager, whom the committee identifies as the executive officer responsible for group companies, in charge of SPMS from April 2023. Asked in an April 2024 interview about telling people they would be fired, that officer said he often said such things to executives so that they would feel tension; the May 2024 report could not confirm that he or his predecessors gave instructions for the misconduct. The individuals are not named in the committee's summary. [src-004]
- Analysis: The committee found that the internal audit and legal & compliance departments delayed interviewing that executive general manager for a month despite repeated questions from PwC Japan, and that the general manager of the Internal Audit Department instructed that a draft explanation for PwC describing the executive as acting as 'President Nagamori's spokesperson' be revised to remove the reference to Nagamori. The finding concerns how unnamed department staff handled the investigation; the vice-chairman's account of pressure is his own statement. [src-004]

## Other cases investigated internally, 2021–2023

- Analysis: The committee's report also mentions briefly, mostly in footnotes and with few details, other cases in which NIDEC's Corporate Administration & Internal Audit Department conducted special investigations. At Copal Yamada Corp. (CYCJ), misconduct involving the overstatement of inventory and sales, based on the president's instructions and covering fiscal 2018 to fiscal 2020, was discovered in the fourth quarter of fiscal 2020 (January–March 2021). At Nidec Automotive Motor (Zhejiang) Corporation (NAMS), inflated orders were placed in the third quarter of fiscal 2021 (October–December 2021) to recover accounts receivable from customers, with the proceeds applied to outstanding receivables. At Nidec Sankyo CMI Corporation (NSCM), the physical inspection results for fixed assets were falsified under the leadership of its CFO in the third quarter of fiscal 2022 (October–December 2022) and the fixed assets inflated. At Nidec Material Technology (Zhejiang) Co., Ltd. (NMZC), a circular transaction was carried out in the first quarter of fiscal 2023 (April–June 2023), and the case was reported to the Audit and Supervisory Committee. The Copal Yamada president and the NSCM CFO are not named. [src-004]

## Sources

- [src-004] Other source · src-004
- [src-003] Company statement source · src-003