Nidec Corp.’s shares plunged 22%, the most on record, after the Japanese electronics components company announced that it had set up a third-party committee to investigate improper accounting.The move was triggered by an internal probe into the accounting of a lump-sum payment of approximately ¥200 million ($1.4 million) by its unit Nidec Techno Motor in Zhejiang. An internal probe found documents suggesting Nidec and its group companies could be practising improper accounting more widely, with management’s knowledge.
“The veracity of the matter is unclear but if there were indeed improper accounting practices, the size of the impact is opaque, which would be a negative surprise,” Citigroup Inc. analyst Takayuki Naito wrote in a note. “The shares are likely to find upside hard work until the results of the third-party committee’s investigation are released.”
In June, Nidec delayed its submission of its securities report over errors in country-of-origin declarations and unpaid import tariffs at a subsidiary in Italy. At that time, Nidec founder Shigenobu Nagamori said the company was prioritizing compliance.
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