Founder Nagamori Responsible for Nidec’s Accounting Fraud: Panel

Tokyo, March 3 (Jiji Press)–Nidec Corp. founder Shigenobu Nagamori bears the biggest responsibility for the major Japanese motor maker’s accounting fraud, which came to light last year, a panel of outside experts said in an investigation report Tuesday. “Numerous accounting irregularities have been discovered at various sites of the Nidec group,” the report said, concluding that Nagamori “is to blame the most.” At a press conference in Tokyo, Nidec President and CEO Mitsuya Kishida offered an apology and said that the misconduct resulted from “unrealistic performance targets and excessive pressure.” To clarify responsibility, four executives, including Chairman Hiroshi Kobe, would resign the same day, the company said. Kishida, who hails from Sony, will remain in office while returning the full amount of his monthly compensation for the time being. Nagamori resigned as honorary chairman Thursday. The independent investigation panel estimated the impact of the accounting fraud on Nidec’s net assets at about 139.7 billion yen. Nidec hinted at the possibility of booking impairment losses of some 250 billion yen, mainly in its auto parts business. The report cited “excessively strong pressure (mainly from Nagamori) to achieve performance targets” as the cause of the fraud. Nagamori was found to have scolded executives by email and through other means, saying, “You should be ashamed!” and “Did you come to Nidec to destroy it?” When there was no prospect of achieving performance targets, an executive different from Nagamori also denounced a related personnel, saying, “You are a Class-S war criminal.” The report denied Nagamori’s involvement in the accounting fraud, saying that he did not “direct or lead” the irregularities. Meanwhile, Kaku Hirao, head of the panel, told the press conference that Nagamori put off taking corrective measures although he was aware of the fraud. He “cannot avoid the evaluation that he had tolerated some of the accounting irregularities,” Hirao added. To prevent a recurrence, the report proposed that Nidec should break away from Nagamori. The panel will continue its investigation of the irregularities. END [Copyright The Jiji Press, Ltd.]