Nidec Shares Plunge After PwC Declines to Sign Off on Annual Financials

Shares of Nidec Corp. (TYO:6594) plunged as much as 18% on Thursday after the company's auditor, PricewaterhouseCoopers, declined to endorse its long-delayed annual report, deepening a crisis of confidence at the major motor manufacturer.

Auditor Issues Disclaimer of Opinion

In Nidec's annual report for the fiscal year ending March 2026, released Wednesday, auditor PwC included a disclaimer stating it was "unable to obtain sufficient and appropriate evidence to form an opinion on the financial report." This type of disclaimer is a significant red flag for investors, indicating the auditor could not verify the accuracy of the financial statements.

The auditor's refusal to vouch for the report adds to severe governance concerns that have plagued Nidec for over a year. The company has previously admitted to improper accounting practices, including non-disclosure of impairment losses and delays in recognizing inventory depreciation.

Widening Losses and Governance Failures

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The unaudited report revealed a substantial operating loss of ¥518.9 billion (approximately $3 billion). This was driven by a massive ¥632 billion impairment loss related to its struggling automotive and commercial products divisions.

In a statement, Nidec acknowledged that “material weaknesses in internal control” had been identified. The company now faces a deadline to submit a report on its internal controls to the Tokyo Stock Exchange by the end of October or risk having its shares de-listed.

Abrupt Leadership Change

Coinciding with the release of the troubled financial report, Nidec also announced the abrupt resignation of CEO Mitsuya Kishida. The company said Chief Technology Officer Michio Kaida would take over as CEO and president, effective immediately, as it attempts to navigate the crisis and restore its reputation.