Nidec Shares Plunge Over 17% After Auditor Refuses Opinion, Raising Delisting Fears

Shares of Japanese motor giant Nidec Corp. (TYO:6594) plunged on Thursday after its auditor, PwC Japan, issued a disclaimer of opinion on the company's annual financial statements for the third consecutive time, escalating fears of a potential delisting from the Tokyo Stock Exchange.

Audit Failure Sparks Sell-Off

PwC Japan stated it was unable to obtain sufficient and appropriate audit evidence to form an opinion on Nidec's consolidated financial statements for the fiscal year that ended in March 2026. This refusal, known as a disclaimer of opinion, is a severe development for a publicly traded company, as a clean or qualified audit is a standard requirement for maintaining a stock exchange listing.

Investors reacted swiftly, sending Nidec's stock down 17.2% to close at ¥1,949, after hitting an intraday low of ¥1,888. The sharp decline reflects significant investor concern over the company's governance and the viability of its stock on the public market.

Record Losses and Accounting Issues

Compounding the audit crisis, Nidec simultaneously announced a record net loss and disclosed the financial impact of widespread accounting issues. Key figures for the fiscal year 2026 include:

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• A record net loss of ¥564.6 billion, a stark reversal from a ¥84.6 billion profit in the prior year.
• Total impairment losses amounting to ¥632.1 billion.
• Extraordinary losses of ¥330.9 billion directly linked to accounting misconduct across multiple group locations.

These results underscore the depth of the operational and governance challenges the company faces. Nidec has been working for over a year to address these lapses in its internal controls.

Regulatory Scrutiny and Delisting Risk

The Tokyo Stock Exchange has already designated Nidec as a "Security on Special Alert," a status that highlights significant concerns about a company's internal management systems. With the third consecutive audit disclaimer, the risk of delisting has become a primary concern for the market.

Analysts had previously warned that the unresolved audit situation would remain a major overhang on the stock. Nidec faces a critical deadline at the end of October to improve its internal control report, a key step in satisfying exchange requirements and avoiding further regulatory action.