Shares of Japan’s Nidec Corp plunged as much as 22.44% on Thursday (Sept 4), after the company disclosed evidence of accounting irregularities tied to senior management at its Chinese unit. This marks the steepest single-day drop in the electronics components maker’s history.
Headquartered in Kyoto, Nidec is among the world’s leading manufacturers of miniature and brushless motors, widely used in computer hard drives, electric vehicles, home appliances, and industrial robots.
So far this year, Nidec shares have fallen 10.61%, compared with a 5.12% gain in the benchmark Nikkei 225 index.
On Wednesday, the company announced the creation of an independent third-party committee after an internal review at Nidec Techno Motor in China uncovered multiple documents suggesting the misconduct may have involved or been known by top management.
In a regulatory filing, Nidec stated: “The investigations found multiple documents suggesting that, in addition to Techno, the Company and its group companies could have engaged in improper accounting with the involvement or knowledge of its or their management.”
This development comes just months after Nidec delayed the submission of its financial report in June, citing “potentially erroneous declarations” of country-of-origin data for certain motors — an issue that may have led to unpaid import tariffs.
The scandal is expected to further strain investor confidence in the company’s financial transparency and expose it to potential regulatory scrutiny.
Despite the controversy, Nidec has been expanding its presence in China. Recently, the company opened the Nidec Qingdao Industrial Park in Shandong province, consolidating its motor and electronics operations under one facility to boost efficiency and competitiveness.
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