Nidec Sinks to Loss on $4 Billion Impairment — Update

By Kosaku Narioka

Nidec swung to a heavy annual net loss due to a $4 billion impairment in its auto-parts division and other businesses, providing the first detailed view of the fallout from an accounting scandal that still failed to earn a nod from its auditor.

The results came a day after Nidec replaced its chief executive with its technology head, seeking new leadership to steer the company's future and revitalization. Nidec earlier this month also disclosed an independent investigation report that identified a series of issues such as falsification and fabrication of testing and inspection results.

The Japanese maker of electric motors and other equipment on Wednesday said it booked a net loss of 564.62 billion yen, equivalent to $3.59 billion, for the year ended March, compared with net profit of Y84.67 billion the previous fiscal year.

The company booked a Y632 billion impairment loss in its latest fiscal year, citing a deterioration in its electric-vehicle motor business and excessive competition for motors used in household appliances in China, among other reasons.

Nidec's auditor, PwC Japan, declined to state its views on the financial statements. It said some of the officers and employees involved with previously disclosed irregular accounting still hold positions of responsibility in the financial reporting process.

The Japanese company in March published a report from a third-party committee that said billionaire founder Shigenobu Nagamori pressured executives to achieve unrealistic earnings targets, ultimately leading to improper accounting. Nagamori stepped down as board chairman in December and as chairman emeritus in February.

The committee said many business units attempted to meet their performance targets by early recognition of sales, avoiding inventory valuation losses and impairment of fixed assets, changing asset valuation methods and capitalizing costs.

On Tuesday, the company said Chief Technology Officer Michio Kaida will succeed Chief Executive Mitsuya Kishida.

Nidec said Kishida tendered his resignation after a review found that he had, on certain occasions, "made statements or engaged in conduct in relation to financial reporting that could not necessarily be regarded as appropriate."

The company faces a potential delisting. The Tokyo Stock Exchange placed Nidec's stock on special alert in October last year and said the company needed to improve internal controls or risk being delisted.

Nidec, led by its founder, expanded its businesses over the years through a number of acquisitions. The company makes a variety of motors used in everything from hard disk drives to electric vehicles. It also produces machine tools, inspection devices and cooling equipment used in data centers.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

September 30, 2026 07:12 ET (11:12 GMT)