Japanese motor parts maker Nidec will sue its founder Shigenobu Nagamori over his role in the country's biggest accounting fraud in a decade. The Kyoto-based company announced it had "decided today to file a suit for damages" against Nagamori, who remains a major shareholder, and eight former executives. A 250-page report published last week found Nagamori and the former employees should bear civil liability for inflating profits by ¥160 billion ($1 billion) over multiple years.
The report estimated the executives should collectively repay ¥27.6 billion ($175 million) in costs related to the scandal incurred through August 2026. Last month, PwC Japan refused to sign off on Nidec's latest accounts despite the company booking ¥632 billion ($4 billion) in fresh impairment charges, citing the continued involvement of financial controllers behind the fraud. Accounting suspicions first surfaced in 2024, but the extent became clear in September 2024 when Nidec launched a probe into "improper accounting." The probe concluded that "excessive pressure" from Nagamori had led business units to inflate revenue numbers to meet profit targets.
Nidec's shares have fallen more than 18 percent this year. Activist investor Oasis Management has overtaken Nagamori as the largest shareholder, pressuring the company to consider being taken private.
Source: Financial Times Companies · Summarized by HeadlinesBriefing