Shares of Japan’s Nidec suffered their steepest-ever drop on Thursday, plunging 22%, after the company announced it will establish an independent committee to investigate suspected improper accounting.
The probe follows internal findings of potential irregularities at a Chinese unit, Nidec Techno Motor. Evidence suggests the involvement or knowledge of management at Nidec and its group companies, raising concerns about the company’s internal controls and governance structure.
The stock closed at 2,420 yen, down 700 yen, marking the maximum daily decline allowed. So far this year, Nidec’s shares have fallen about 15%, in sharp contrast to a 10% rise in the broader Topix index.
Nidec, a key global supplier of motors for electric vehicles and industrial products, said documents indicated that improper accounting may have been used to “arbitrarily” time asset writedowns. The third-party committee will further investigate these findings.
This is not the first time Nidec has faced scrutiny. In recent years, it postponed its annual report over errors in import declarations, revised profits due to inflated sales records, and previously faced criticism for aggressive accounting practices. Despite these setbacks, Nidec continues to invest heavily in EV drive units and cooling modules for data centres, seeking growth beyond its automotive motor business.