Nidec Shares Plunge Over Accounting Probe Into China Subsidiary

Nidec Corp., a Japanese electric motor manufacturer critical to the electric vehicle supply chain, saw its shares plunge by up to 22.5% following revelations of potential improper accounting practices involving its Chinese subsidiary, Nidec Techno Motor. Internal investigations uncovered documents suggesting possible management involvement or awareness in accounting irregularities, including a questionable lump-sum discount of about ¥200 million. In response, Nidec established an independent third-party committee to conduct an objective investigation, assess the financial impact, identify root causes, and recommend preventive measures. This probe adds to investor concerns about governance under founder Shigenobu Nagamori, especially after a previous accounting revision in 2024 that cut operating profits by approximately $67 million due to inflated sales records. Despite prior scrutiny, including allegations from short-seller Muddy Waters in 2016, Nidec remains under heightened observation as it pledges full cooperation and transparency during the ongoing inquiry. The stock's sharp decline reflects market anxiety over the company's internal controls and future stability amid these developments.