Shareholder demands and lawsuits over NIDEC's accounting

analysisUnder Article 847(1) of the Companies Act a shareholder can demand in writing that the company itself sue its directors; such a demand is a shareholder's allegation and a pre-suit step, not a finding of liability. NIDEC announced on 30 March 2026 that on 27 March it had received such a demand from one individual shareholder, asking it to bring suits to pursue the liability of several current and former directors on grounds of accounting misconduct and related matters. The notice names none of the directors concerned and states no amount. NIDEC said it was examining, through the Executive Responsibility Investigation Committee, whether current and former directors, auditors and executive officers bear legal liability, would decide on the basis of the committee's report and recommendations whether to claim damages or take other legal action, and would disclose its decision promptly. ¹

analysisThe same shareholder delivered a further demand on 16 July 2026, which NIDEC announced on 21 July. It asked NIDEC to sue several former directors over the interim dividend and the acquisitions of NIDEC shares exceeding the distributable amount that NIDEC had disclosed on 2 June 2023 and in its notice of 16 June 2023 on receiving an external investigation committee's report. This demand, too, is an allegation and a pre-suit step, and NIDEC's notice names none of the former directors and states no amount. NIDEC gave the same answer: the Executive Responsibility Investigation Committee was examining the legal liability of current and former directors, auditors and executive officers, NIDEC would decide on the basis of its report and recommendations whether to claim damages or take other legal action, and it would disclose its decision promptly. ²

analysisTwo further demands followed in August. NIDEC announced on 5 August 2026 that it had received that day a written demand from one individual shareholder, and on 21 August 2026 that several shareholders had jointly delivered one on 20 August; both asked NIDEC to bring suits to pursue the liability of several current and former directors on grounds of accounting misconduct and related matters. As before, the notices name none of the directors and state no amounts, and the demands are shareholders' allegations and pre-suit steps, not findings of liability. NIDEC's response to each was that it would decide, on the basis of the Executive Responsibility Investigation Committee's report and recommendations on the legal liability of current and former directors, auditors and executive officers, whether to claim damages or take other legal action, and would disclose its decision promptly. ^{3 4}

analysisA press account gives more detail than NIDEC's notices. According to an online news report of 5 August 2026, a shareholder sent NIDEC a written demand asking it to sue nine current and former officers, including founder Shigenobu Nagamori and then president Mitsuya Kishida, for damages totalling ¥5 billion, the losses claimed including damage to the company's reputation and the cost of the Third-Party Committee. The report noted that under the Companies Act the shareholder may bring a derivative suit if the company does not sue within 60 days of receiving the demand. The demand letter itself is not in the record, NIDEC's own notices of shareholder demands name no directors and state no amounts, and a demand remains an allegation and a pre-suit step, not a finding of liability. ⁵

analysisAccording to a Japanese business magazine report of 31 July 2026, an Osaka-based shareholders' rights lawyers group, moving to pursue the liability of founder Shigenobu Nagamori, formally decided on 30 July 2026 to ask NIDEC to bring a damages suit against nine former directors, including past presidents and a vice chairman; it names Hiroshi Kobe, Mitsuya Kishida, Mikio Katayama, Hiroyuki Yoshimoto and Jun Seki among them, calling all nine former directors although Kishida was then still NIDEC's president. The group put NIDEC's loss at no less than ¥5 billion, said shareholders on its side would file a derivative suit if NIDEC refused, and planned to send its written demand in early August. These are a lawyers' group's plans and allegations as reported by a magazine, and the record does not show which, if any, of the demands NIDEC disclosed in August 2026 came from this group. ¹

analysisThe magazine reported the group's contention that Nagamori had long been aware of the problems and tolerated accounting treatment that led to misconduct. It cites a Nidec Instruments company-housing property, for which Nagamori allegedly instructed in 2022 that efforts be made to sell it at a price avoiding a loss, with an impairment of about ¥414 million recorded only in fiscal 2024 (year ended 31 March 2025) although the Third-Party Committee found it belonged in fiscal 2020; and Mitsuya Kishida's repeated fiscal 2024 proposals for a structural reform dealing separately with 'negative legacies', which Nagamori reportedly rejected. None of this is a court finding, and the committee references are the magazine's summary: the committee itself found no facts indicating that Nagamori instructed or directed the improper accounting, while concluding that he condoned the planned handling of some of it. In an interview with the committee, before the group's announcement, Nagamori said he had held that assets requiring resolution should be dealt with immediately but sometimes accepted an employee's request, made out of compassion for domestic group companies struggling to meet targets, to deal with them in a planned manner. ^{2 3 4}

analysisNIDEC announced on 10 September 2026 that an individual shareholder had filed a derivative action in the Kyoto District Court on 9 September 2026 (No. 1749, 2026 (wa)) against two former directors, Shigenobu Nagamori and Hiroshi Kobe. According to NIDEC's summary, the plaintiff claims that NIDEC's acquisitions of treasury shares in September 2022 and in February-March 2023 and its interim dividend of December 2022 were illegal because they exceeded the distributable amounts under the Companies Act and the Corporate Accounting Rules, and demands under Article 462(1) of the Companies Act that the defendants and others pay NIDEC ¥28,730,558,300 (about ¥28.7 billion) plus delinquency charges. No ruling is in the record, and the notice does not say whether the plaintiff made any of the earlier written demands. NIDEC said the suit, which seeks payment from former directors as individuals, would not affect its business performance, and that it would examine measures concerning the litigation on the basis of the Executive Responsibility Investigation Committee's reports and recommendations. ¹

analysisA second suit filed the same day is directed against NIDEC itself. Vbest Law Office announced that on 9 September 2026 it filed a suit in the Tokyo District Court on behalf of 28 shareholders against NIDEC, seeking damages totalling ¥66,150,966 for losses they attribute to the fall in NIDEC's share price associated with its accounting misconduct. The firm describes it as a securities suit by shareholders against the issuer, distinct from a derivative suit against current or former officers, and says it recruited as plaintiffs, from 5 March 2026, shareholders who held NIDEC shares on 3 September 2025. These are the plaintiffs' claims as announced by their own law firm; no court ruling is in the record. ²

analysisIn the United States, The Rosen Law Firm distributed a press release on 17 February 2026 announcing an investigation of potential securities claims on behalf of NIDEC shareholders (OTC: NJDCY) 'resulting from allegations that Nidec Corporation may have issued materially misleading business information to the investing public'. It said it was preparing a class action, invited purchasers of NIDEC securities to join it, and cited a 22.7% fall in NIDEC's American Depositary Receipts on 4 September 2025, following a media report that NIDEC had announced a probe into allegations of improper accounting in its group. The release is a law firm's solicitation of potential clients announcing an investigation, not a lawsuit, and no US class action filed against NIDEC is in the reviewed record. ³

analysisNIDEC's own route to deciding whether to sue runs through the Executive Responsibility Investigation Committee, set up on 13 March 2026 by resolution of its board of directors and its Audit and Supervisory Committee. The committee consists solely of outside experts: attorney Shin Kikuchi as chair, attorney Haruka Matsuyama, and certified public accountant Kenichi Akiba, professor emeritus of Waseda University. Its stated purpose is to investigate, in light of the Third-Party Committee's report, whether people who were directors (including Audit and Supervisory Committee members), corporate auditors or executive officers between fiscal 2020 and the first quarter of fiscal 2025 bear legal liability, including liability for neglect of duties, and to report and make recommendations so that NIDEC can make an appropriate and fair judgment. It is a committee appointed by the company; according to NIDEC's annual securities report for the year ended 31 March 2026 its investigation was still under way, and it has made no finding in the record. ^{1 2}

analysisNIDEC's annual securities report for the year ended 31 March 2026 states that the committee, made up of outside experts with no interest in the persons concerned, was still investigating the legal liability of current and former directors, auditors and executive officers, and that NIDEC would decide on the basis of its report and recommendations whether to claim damages or take other legal action. The report adds that the performance-linked share compensation it reports includes provisions for officers under the committee's investigation, whose payment has not been finalised and will be decided in light of the committee's results. This is NIDEC's own statement of the committee's status; no committee report is in the record. ¹

analysisPress reports identify some of the people within the committee's scope. According to a press report of 21 August 2026, the committee covers directors, auditors and executive officers who served between fiscal 2020 and the end of June 2025, and those under investigation include founder Shigenobu Nagamori and then president Mitsuya Kishida. According to a press report of 2 October 2026 on NIDEC's press conference of 1 October, outside director and board chair Soichiro Sakuma said that Kishida was subject to the committee's investigation and could, depending on the outcome, be held legally liable. Being within the scope of the investigation is not a finding of liability or of participation in the irregularities, and no report of the committee is in the record. ^{3 4}

analysisNIDEC's annual securities report for the year ended 31 March 2026 states that in July 2026 its legal department collected litigation information from regional legal staff as at the end of the first quarter of the fiscal year ending March 2027 and shared 480 lawsuit cases with the accounting department, which checks material cases individually for necessary provisions or for any disclosure required in the consolidated financial statements. The figure is a count of group litigation of all kinds collected for internal reporting; the report does not list the cases or say how many relate to the accounting irregularities. ¹

analysisAn earlier commercial dispute concerned a sale price. NIDEC's annual securities report for the year ended 31 March 2023 states that, as ordered by the European Commission as a condition of its acquisition of Whirlpool's compressor business Embraco, NIDEC sold its compressor subsidiary Secop on 9 September 2019 to the ESSVP IV funds. After the parties failed to agree on purchase-price adjustments, NIDEC filed for arbitration with the German Arbitration Institute on 12 January 2021, and after about 26 months of negotiation the parties settled in March 2023, ending the arbitration. NIDEC said some sale-related costs were still expected to arise. The report does not disclose the settlement terms and does not connect the dispute to the accounting irregularities. ²

analysisA patent matter predates the accounting case. The US International Trade Commission instituted investigation No. 337-TA-1073, concerning certain thermoplastic-encapsulated electric motors and products containing them, on 11 October 2017 on a complaint filed on 5 September 2017 by Intellectual Ventures II LLC alleging patent infringement; the respondents included Nidec Corporation and Nidec Automotive Motor Americas, LLC. According to the Commission's notice published in the Federal Register on 25 July 2019, the investigation had been terminated in part as to Nidec and other respondents through notices issued in 2018, and the Commission then terminated it with a finding of no violation of section 337 as to the remaining respondents, Aisin, Honda and Toyota. The notice does not state the grounds on which the investigation was terminated as to Nidec, and the matter is unrelated to the accounting irregularities. ³