Nidec founder shut down call for accounting probe in 2017, report finds

{"text":[[{"start":9.44,"text":"Shigenobu Nagamori, the firebrand founder of Nidec, shut down an internal call in 2017 for a probe into accounting issues that have since ballooned and plunged the world’s largest motor parts maker into a battle for survival."}],[{"start":23.12,"text":"The revelations came as part of a sweeping 250-page report that said Nagamori and eight other former executives should bear civil liability for their role in Japan’s biggest accounting scandal in a decade. The report was written by an independent three-person committee."}],[{"start":39.24,"text":"According to the report, Nagamori quashed a request from a Nidec executive to establish a probe with external lawyers and accountants to examine ¥22bn ($139mn) of potentially problematic assets at Nidec — and even suggested the board could only be informed if the figure was halved."}],[{"start":57.648,"text":"“Mr Nagamori is found to have neglected his duties . . . by failing to report to the board of directors and the board of corporate auditors the suspicions of accounting fraud,” said the report."}],[{"start":null,"text":"

"}],[{"start":67.66,"text":"Nagamori did not immediately respond to a request for comment."}],[{"start":71.12,"text":"Nagamori’s fall from grace has been swift. He resigned as chair emeritus in February, although he remains the company’s second-largest shareholder. Once venerated by Japan’s business elites, Nidec even published a biographical comic book, The man hotter than the Sun, featuring the founder as a corporate superhero."}],[{"start":88.64,"text":"However, a series of internal reports has since painted him as an extremely demanding boss who used a culture of excessive pressure to achieve results and has been blamed for many of Nidec’s issues."}],[{"start":null,"text":""}],[{"start":100.88,"text":"Tuesday’s report went even further in pinning responsibility on Nagamori because of his approach to accounting that first decided a profit level, before working backwards to determine what level of asset impairments would be acceptable."}],[{"start":113.48,"text":"Nidec shares have plummeted to their lowest level in close to a decade as the extent of the scandal and its inability to clean up its act have become increasingly clear in recent weeks. Its market capitalisation now sits at close to ¥2.1tn."}],[{"start":128.76,"text":"Last month, PwC Japan refused to sign off on Nidec’s accounts despite it booking fresh impairment charges of ¥632bn. The company is now in a race against time to convince the Tokyo Stock Exchange that it has sufficiently improved internal controls or risk being delisted."}],[{"start":147.08,"text":"Nidec and its aggressive dealmaking were held up as an example of a new, more confident Japanese capitalism."}],[{"start":153.56,"text":"The company, founded in 1973 in a prefabricated hut in Kyoto by Nagamori and three fellow graduates, went on to make 75 acquisitions in 42 years to become the world’s dominant motor parts maker."}],[{"start":166.76,"text":"Last week Oasis Management, one of the most aggressive activist investors in Japan, disclosed that it had become the company’s largest shareholder, overtaking Nagamori with a 9 per cent stake, and is pushing for Nidec to be taken private."}],[{"start":180.36,"text":"However, bankers say that the deepening legal questions around Nidec could complicate a sale or privatisation, with buyers having to make their own calculations about potential liabilities."}],[{"start":196.36,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792493750_9545.mp3"}