Nidec (6594) investor relations material

Apology, Context, and Background

• Expressed deep regret for delayed Q3 FY2025 earnings disclosure and TSE's Security on Special Alert designation.

• Shares were designated as Security on Special Alert due to significant internal management deficiencies and audit disclaimers for financial statements.

• Multiple incidents of suspected improper accounting, customs violations, and tax underreporting were identified across subsidiaries.

• A third-party committee and internal investigations were launched to determine the scope and impact, with initial findings expected by end of February.

Reform Process, Committees, and Structure

• Nidec Corporate Reform Committee and Third-Party Committee established to analyze systemic, cultural, and organizational issues, not individual actions.

• Committee includes 13 members and multiple working groups, engaging external experts for guidance and conducting in-depth analysis.

• Activities include interviews, cause analysis, planning, execution, and monitoring of improvement measures.

• Emphasis on transparent, group-wide engagement and honest dialogue to identify root causes.

Key Issues, Root Causes, and Cultural Analysis

• Six major causes identified: accounting, corporate culture, governance, internal audits, whistleblowing, and responsibility clarification.

• Excessive focus on shareholder value, short-term profit prioritization, and unrealistic targets led to micromanagement and discouraged voicing concerns.

• Authority was concentrated with the former representative, leading to governance and risk management weaknesses.

• Board of Directors lacked sufficient risk information and diversity of expertise.

• Internal audit and group management systems were fragmented and insufficient.