Nidec Shares Plunge 19% After Tokyo Exchange Delisting Warning Over Accounting Irregularities

Shares of Nidec Corp., a Japanese electric motor manufacturer, plunged nearly 20% after the Tokyo Stock Exchange placed the company on special alert due to suspected accounting irregularities and called for improvements in internal controls. The exchange's move came after auditors declined to issue an opinion on Nidec's financial statements, citing ongoing investigations into dubious accounting practices, including improper timing of asset write-downs at its Chinese and Italian subsidiaries. As a result, Nidec will be removed from major indexes such as the Nikkei 225 and Topix in November, leading to forced selling by index-tracking funds and increased pressure on its stock. The company has withdrawn its earnings forecasts, canceled its interim dividend and share buyback program, and pledged full cooperation with investigations while working to strengthen governance and restore investor confidence. This scandal highlights ongoing challenges in Japan's corporate governance landscape and regulatory efforts to enhance transparency. Investors remain cautious as Nidec faces a one-year deadline to rectify internal control deficiencies or risk delisting.