Shigenobu Nagamori, founder of Nidec, shut down an internal call in 2017 for a probe into accounting issues that have since ballooned and plunged the world's largest motor parts maker into a battle for survival. The revelations came as part of a sweeping 250-page report that said Nagamori and eight other former executives should bear civil liability for their role in Japan's biggest accounting scandal in a decade. The report was written by an independent three-person committee.
According to the report, Nagamori quashed a request from a Nidec executive to establish a probe with external lawyers and accountants to examine ¥22bn ($139mn) of potentially problematic assets at Nidec — and even suggested the board could only be informed if the figure was halved. "Mr Nagamori is found to have neglected his duties . . . by failing to report to the board of directors and the board of corporate auditors the suspicions of accounting fraud," said the report.
Nagamori did not immediately respond to a request for comment. Nagamori's fall from grace has been swift. He resigned as chair emeritus in February, although he remains the company's second-largest shareholder. Once venerated by Japan's business elites, Nidec even published a biographical comic book, The man hotter than the Sun, featuring the founder as a corporate superhero. However, a series of internal reports has since painted him as an extremely demanding boss who used a culture of excessive pressure to achieve results and has been blamed for many of Nidec's issues.
Nidec shares have plummeted to their lowest level in close to a decade as the extent of the scandal and its inability to clean up its act have become increasingly clear in recent weeks. Its market capitalisation now sits at close to ¥2.1tn. Last month, PwC Japan refused to sign off on Nidec's accounts despite it booking fresh impairment charges of ¥632bn. The company is now in a race against time to convince the Tokyo Stock Exchange that it has sufficiently improved internal controls or risk being delisted.
Source: Financial Times Companies · Summarized by HeadlinesBriefing