Claims
Nidec sues founder and eight former executives over accounting fraud
By Insurance Wire Staff, . Insurance Wire.
Nidec, the Japanese manufacturer best known for making electric motors, announced Tuesday it will sue founder Shigenobu Nagamori and eight other former senior executives for damages tied to suspected accounting fraud, according to Claims Journal.
Who is being sued
One of the former chief executives, Jun Seki, now serves as chief strategy officer for electric vehicles at Foxconn, the Taiwanese electronics giant. Foxconn did not respond to requests for comment on Seki's behalf.
The Tokyo Stock Exchange placed Nidec on "special alert" in October 2025, giving the company one year to fix its internal controls or face delisting. That deadline is now approaching. The exchange acted after Nidec disclosed concerns about inappropriate accounting at certain group companies.
What the investigation found
An independent committee of outside lawyers, appointed by Nidec and reporting this month, concluded that Nagamori had failed to report suspected irregularities to the board and auditors and had not sought the necessary investigations. The committee characterized this as a breach of his supervisory duties.
The accounting problems have drawn scrutiny beyond the company itself. PwC Japan, Nidec's auditor, declined last month to issue an opinion on the company's accounts for the fiscal year ended March 2026, saying it could not gather sufficient evidence to do so. An auditor refusing to sign off on a company's books is a serious signal: it means the financial statements cannot be relied upon until the underlying questions are resolved.
Nidec said it has not yet determined how much compensation it will seek and will file the lawsuit once that figure is set.
Why this matters beyond Japan
For insurers and reinsurers with directors and officers (D&O) liability exposure, meaning policies that cover corporate leaders against claims arising from their decisions, this case is a live example of how quickly governance failures can escalate. A founder-led company, a multi-year accounting problem, a regulator threatening delisting, an auditor walking away, and now civil litigation against nine individuals: each step raises the potential claims exposure.
The difficulty of reaching the defendants is itself a practical complication. A Nidec spokesperson told the publication that the company could not supply contact details for Nagamori, Kobe, or Kishida because all three had already left the organization.
The delisting clock is the most immediate pressure point. If the Tokyo Stock Exchange concludes by October 2026 that Nidec's internal controls remain inadequate, the company loses its listing, which would affect shareholders, counterparties, and any insurer whose policy is tied to the company's continued operation as a publicly traded entity. Whether the lawsuit itself, or the governance reforms it signals, will satisfy the exchange is not yet known.
Source: https://www.claimsjournal.com/news/national/2026/10/28/340953.htm
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