Nidec Suspected of Product Quality Fraud

Kyoto, May 13 (Jiji Press)–Major Japanese motor maker Nidec Corp. said Wednesday that improper activities, such as changing materials, manufacturing processes and designs without customer approval, are suspected for some of the firm’s products. There are believed to be more than 1,000 such improper cases, according to sources familiar with the matter. The company, based in the western city of Kyoto, is considering setting up an investigation committee composed of outside experts. Nidec said that it has begun contacting and providing explanations to customers, and plans to announce facts and its response related to the suspected quality fraud later on Wednesday. The quality irregularities came to light as a result of an internal inspection conducted in the wake of the accounting fraud discovered at the company last September. “No issues have been identified that would immediately affect product functionality or safety,” Nidec said in a statement released Wednesday. Still, it is likely to take more time before the company can regain trust following the discovery of the additional misconduct. Over the accounting irregularities, an investigation committee made up of outside experts including lawyers compiled last month a final report saying that the company had inflated its net profit by a total of 160.7 billion yen. As a major factor behind the irregularities, the report pointed out that the company’s founder, Shigenobu Nagamori, had put strong pressure on its staff to meet performance targets. On Oct. 28 last year, the Tokyo Stock Exchange designated Nidec, listed on its top-tier Prime section, as an issue on “special alert.” The company could be delisted unless it improves its internal control system in a year’s time. END [Copyright The Jiji Press, Ltd.]