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Nidec Faces Record Stock Plunge

Shares of Nidec Corp., the world’s largest maker of small precision motors, tumbled 22.44% on Thursday, marking the steepest one-day fall in the company’s history. The selloff came after the Kyoto-based manufacturer revealed troubling findings from an internal probe into accounting irregularities at its Chinese arm, Nidec Techno Motor.

The probe, triggered by a suspicious 200 million yen ($1.35 million) lump-sum payment, indicated evidence of misconduct possibly tied to senior management.

Independent Committee to Lead Investigation

Following the discovery, Nidec announced the formation of an independent third-party committee to conduct a deeper investigation. According to a regulatory filing, investigators uncovered documents that suggested not only Nidec Techno Motor but also other group entities may have engaged in improper accounting practices with either the involvement or knowledge of management.

This revelation comes just months after Nidec delayed its financial filings in June due to erroneous declarations of country-of-origin reports, an issue that raised concerns over unpaid import tariffs.

Market Performance and Investor Reaction

The market response was swift and severe. With Thursday’s collapse, Nidec’s shares have now fallen 10.61% year-to-date, significantly underperforming the Nikkei 225 index, which has gained 5.12% in the same period.

Analysts noted that investors are increasingly worried about governance standards at the company, especially as Nidec expands aggressively into China and other markets. The news also raises questions about whether more accounting issues could surface as the independent probe continues.

Global Footprint and Strategic Expansion

Nidec, founded in 1973, supplies motors for a wide range of applications — from hard disk drives and electric vehicles to household appliances and industrial robots. It has manufacturing and operational bases in China, India, France, Germany, and the United States.

The company recently ramped up its China strategy with the opening of the Nidec Qingdao Industrial Park in Shandong Province, consolidating its motor and electronics operations under one roof to strengthen its supply chain and market reach.

Looking Ahead

While Nidec remains a global leader in motor technology, the ongoing investigation poses a significant risk to its reputation and investor confidence. Industry watchers are now waiting to see whether the independent committee’s findings will lead to broader management shakeups or further regulatory scrutiny.

The outcome could prove pivotal not just for Nidec’s future growth, but also for market trust in one of Japan’s most prominent industrial names.