Let us start today's Press Conference on Nidec's Status on its Corporate Reform. Today's presenters are Mr. Michio Kaida, President and CEO of Nidec Corporation. Mr. Masayuki Minai, Representative Director and Senior Vice President. Mr. Hiroshi Yoshii, an outside member of the Board of Directors and a full-time member of Audit and Supervisory Committee of the company, and Mr. Kazuo Nakagawa, a Vice President and acting CFO of the company. I'm Keita Watanabe of the company's Corporate Communication Department and the moderator of this press conference. Two of the executives of PwC Japan, which audits Nidec, are with us today. They are Mr. Masataka Kubota as well as Mr. Yoshihisa Chiyoda. They will join us and be introduced later. In today's press conference, first, Mr. Kaida will make his opening remarks and present information on Nidec's actions on going forward based on the report issued by Executive Responsibility Investigation Committee.
Mr. Minai will explain the document on company submission of its Written Confirmation of Internal Management System, followed by Mr. Nakagawa's presentation of auditor's opinion. Lastly, Mr. Kaida will explain Nidec's actions going forward. After these presentations, Messrs. Kubota, as well as Mr. Chiyoda of PwC Japan will join us for a question- and- answer session. Please kindly wait to ask your questions until then. Now, Mr. Kaida will start his presentation.
I'm Michio Kaida, Nidec Corporation's President. First of all, I deeply apologize to our shareholders, investors, business partners, and other stakeholders for the tremendous anxiety and trouble caused by our company's inappropriate accounting practices and other issues. The investigation report issued by the Executive Responsibility Investigation Committee recognizes the illegal responsibility of our company's founder and other former executives.
Nidec respects the committee's decision, faces the issues caused so far, and addresses them strictly in accordance with laws, regulations, and the facts. We also take seriously the fact that the company is still unable to obtain our auditor's unqualified opinion a year after Nidec's stock was designated as a Security on Special Alert. To date, we have worked to improve our internal management system and resolve audit-related issues while advancing the development of necessary systems and frameworks. On the other hand, as there remain issues pointed out by our accounting auditor, we are dedicating our service to solving them. We will continue to discuss with our auditor to steadily take necessary actions.
In today's press conference, we will present information on Nidec's actions based on the investigation committee's report, the status of our company's internal management system, our actions with respect to the auditor's opinions, and Nidec's actions going forward. We would like to be seated from here on. Next, Mr. Kaida will explain Nidec's actions going forward based on the report issued by the Executive Responsibility Investigation Committee. First, I will explain the report of the Executive Responsibility Investigation Committee and the decision on whether to file a lawsuit. As already disclosed, we received an investigation and a report from the Executive Responsibility Investigation Committee on whether there was legal liability, including liability for failure to perform duties in connection with the performance of the duties of the directors, auditors, or Vice Presidents during the relevant period regarding the series of inappropriate accounting practices revealed in the Third-Party Committee's report.
As a result, it was concluded that the following nine individuals bear liability for damages. However, we received the opinion that the scope of the damages should be determined according to each individual's degree of contribution. Furthermore, the amount of damages caused to Nidec was approximately JPY 27.6 billion, comprising investigation expenses, audit fees, and listing penalties. I would like to also add that the amount of damages may increase in the future. Based on these results, at the board of directors meeting and Audit and Supervisory Committee meeting on October 27th, it was resolved that the billing for damages would be filed against the executives deemed responsible as described below. With respect to the violation of regulations on distributable amounts, the company will consider the necessary legal measures after completing the correction of the financial statements for prior fiscal years, and will respond promptly.
Now, from the report of the Executive Responsibility Investigation Committee, we have confirmed that in the past, our company had a reality in which corporate accounting and accounting audit system have been neglected. First, matters that should have been handled rigorously in accordance with the accounting standards, such as impairment accounting and provisions, were in fact handled according to the achievement of profit targets. Secondly, it was found that for many years we had held an incorrect understanding of the accounting audit system. We will take those findings seriously and steadily promote fundamental reforms to our corporate culture, striving to regain the trust of society. That is all from me for now.
Next, Mr. Minai will present information on submission of Written Confirmation of Internal Management System
. Please take a look at this slide over here. This is the events that have led to present date.
It was back on October 20th last year, our stock was designated as Security on Special Alert, and since then, we have made a company-wide effort to have this status removed. It was October 30th that we have established a Nidec Corporate Reform Committee, and after that, on January 28th this year, we have submitted the initial version of the improvement plan, and we started working on various measures. In April this year, we received a final report from the Third-Party Committee, and on April 27th, we submitted a revised version of our improvement plan. Then we have added some quality related issues to be part of the report. Since then, we are trying to implement measures promised in this improvement plan.
As of October 30th, which is coming in a few days, we are going to submit a Written Confirmation of Internal Management System to the Tokyo Stock Exchange for their deliberation.
Next page, please. Here on this page, after one year efforts, we have this overall picture of initiatives for improving the internal management system. For the company-wide reforms, we are implementing an operating necessary improvement in each areas of culture, system, and process. As for culture, we are putting emphasis on compliance, and we are having this organization in place so that we are having the improvement of internal whistleblowing systems and training by hierarchical level. Other than that, on the system and the process, we have those company-wide reforms. During these company-wide reforms, we are looking at those areas which has been indicated, and that we are having the measures in accounting and quality, customs, so that in the practical areas, we are making efforts in order to improve the company in accounting, customs, and quality.
In those areas, measures in each field, implementation of recurrence prevention mechanisms, so that we are keeping this, and we are checking the situation. By the internal management system, we are having this document, and we had submitted the Written Confirmation of Internal Management Systems to the Tokyo Stock Exchange. Then we would have the review by the security exchange. That is the current situation that I'd like to report to you. That is all for myself. Thank you.
Next, we are going to have Mr. Nakagawa explain the opinions of Nidec's auditors.
Yes, I'll be explaining about this. on September 30th, we had published the 2026 audit report and the basis for disclaimer of opinions and responses. We have two points here. On October 28th, as to how we had been regarding this.
In the investigation of the involvement in proper accounting for the vice president. In the third page of the release, we had gone into details about that. I'd be happy if we can check with that. As for the current situation on September 30th. There are things that have not been complete. There are issues that are partially incomplete. After September 30th, we are asked by the auditors to make the additional reports. Okay, I'll explain about that. It's one, about the impairment of the assets, so the FY 2025 and of the shares, to have the accounting evidence so that we had reported to the auditors. On 2025, March reporting, the fiscal years prior to that, we are still negotiating with these auditors. Next slide.
After September 30th, outstanding items as of September 30th, we had been asked so that in order to have the trust of the financial reporting, so that we had enlarged the scope, and we are having the additional measures. The second from the top, additional tasks from October 10th, so that re-verification of financial reporting processes, including those identified as involved in misconduct of those reporting processes involving 20 individuals, and those selected through eligibility verification of candidate signatories, so that we reported the results of the company's procedures to the auditor on October 27th. Then as for the digital forensics for eight current officers as of October 8th. We are requested by the auditor on October 8th, so that we had reported the results of the company's procedures to the auditors on October 27th.
As of October 28th, the bottom one has not been complete, so the 252 candidate signatories to the management representation letter, so that candidates who are subject to additional confirmation requests from the auditor, email screening and other procedures are not completed. This is on page five of the press release that we put forward today. Those outstanding items within this month of October, we are going to report to the auditors the results. The next slide. Our company, the implementation of improvement measures is steadily progressing, and the company will submit the Written Confirmation of Internal Management System to TSE on October 30th, as stated by Minai-san. Our company, we are taking the disclaimer of opinion seriously, and the company will complete additional procedure in November and, based on the results, further enhance the effectiveness of the internal control systems.
On 2026, March, the financial reporting, and we also have the contract with the auditors about that for the modification of those financial statements. Mr. Kaida would go into the actions going forward. I'll be going into our actions going forward. After our stock was designated as a Security on Special Alert last year, we established a new Nidec Corporate Reform Committee and spent a year reflecting on what we had done in the past while developing a Written Confirmation of Internal Management System. What we are working on toward revitalization is governance reform. Fundamental reform of our organization and corporate culture has begun as a global initiative. Discussions have also begun on strengthening and optimizing the organizational foundations of our group, which has 350 locations in 40 countries worldwide.
In addition, a plan to renew our IT infrastructure has also been set in motion. In April this year, we issued a Re-Definition declaration declaring that we will not return to the past, and today, on October 28th, we declared Forward so that this day would never be forgotten. This Forward is a message conceived by the young employees who make up the Culture Transformation Lab, which was launched in February. This is a declaration put into words of the significance of October 28th that we will never make the same mistake again for all eternity. We will make this a guiding principle for all employees to act with integrity, always correctly and fairly, so that we may earn the trust of society. We are determined to expand globally our efforts to build a corporate culture from the ground up.
We believe that we must make Forward the foundation of the entire company, and rebuild that foundation once again toward its revitalization. Doing basic things on a routine basis. Our company is a public institution of the society, and quality, governance, and compliance are matters that must naturally be achieved and observed. We will return to the roots of human resources. Development and manufacturing, we will devote every effort to becoming, once again, a company that contributes to society through the technologies Nidec inherently possess. To explain Nidec's vision for the future in the medium-term management plan, we are committed to ensuring the reliable implementation of the Written Confirmation of Internal Management System we developed ourselves. Nidec possesses many composite technologies. Nidec has well over 10,000 companies worldwide as business partners.
We will fundamentally reform governance, operate it effectively to earn trust, and strive to become a company that can contribute to sustainable social infrastructure and innovation with an eye towards that future. This is my final slide. Regarding the schedule going forward, as I explained earlier, we will submit the Written Confirmation of Internal Management System on October 30. We will devote every effort to resolving the remaining issues so that we can obtain an unqualified audit opinion on the corrected financial statements. At the same time, we will continue preparing so that we can present our medium-term management plan in the future. We once again sincerely apologize for the concern and the distress caused to our many shareholders since we were designated as a Security on Special Alert last year.
We will work as a company-wide effort to earn the trust of everyone involved in the market as soon as possible, and we respectfully ask for your continued support. That concludes my presentation. Thank you very much for your attention.
As we start the question- and- answer session, we are joined by two of the executives at PwC Japan, which audits our company, Mr. Masataka Kubota and Mr. Yoshihisa Chiyoda. PwC Japan LLC is not here to explain or assess the notice on Nidec's status to lift the disclaimer of opinion status, as PwC Japan is an accounting auditor independent of Nidec. Messrs. Kubota and Chiyoda will answer questions in their capacity from an accounting auditor's viewpoint. I would like to explain who these people are. PwC Japan LLC executives are Mr. Masataka Kubota, territory senior partner and chair, and Mr. Yoshihisa Chiyoda, executive officer and Chief Audit Service Officer.
Please be seated. We will now move on to the question- and- answer session. Those who wish to ask questions, please raise your hand. Before questions, please state your name and affiliation. In order to answer as many questions as possible, we would like to limit each person to two questions. Thank you in advance for your understanding and cooperation. The person from the second row from the entrance area.
Thank you very much. This is Fujita of Nikkei Newspaper. Thank you very much. Here is my first question, which is about the schedule of your company going forward. I believe you are currently working on audit-related issues, and you will take time until the end of November, according to your presentation. As Nidec, going forward, how are you going to secure to obtain unqualified opinion from your auditor? When is the deadline? With respect to PwC executives, I would like to ask them, if the Nidec's auditing work is to be completed by the end of November as scheduled, how long will PwC's audit last? I believe the deliberation by TSE may be impacted based on the timing for you to finish your work.
Thank you very much for your question. Mr. Minai will answer the question for you.
Thank you very much for your question. This is Minai speaking. With respect to your question, the first one, I believe, as it is written here on the slide, by the end of November, we are planning to finish all the additional work that has been requested to us. We will do our very best to do that. Then we will have PwC executives work on auditing the related issues. That's the timing for switching the baton from us to PwC. They will be working on all the checking regarding accounting-related issues. The remaining portion is not really something we can answer. I would like to have PwC executives answer that part of the question. Thank you very much.
With respect to the audit, first, we will receive the auditor documents from Nidec.
We will check the contents to see if there is any additional work will be necessary or not. That's the decision we will make then. At the end of November, we will have Nidec submit their documents to us. So at this moment, it's very difficult for us to see if there is any problems or not. Of course, we would like to make sure to cooperate with Nidec to make things go forward as promptly as possible.
My second question is regarding Nidec's internal management system. You said that there are some remaining work with respect to the internal management system, but there is not really a position about the internal management system. But with respect to the signers for the documents, you need to check to see who would be the appropriate persons. I believe these people will make some impact on the company's internal management system.
You are still doing the investigation, but you're trying to I'd like to hear from your Nidec personnel about what you feel and how PwC is evaluating Nidec's work on this internal management system. That's what I'd like to know from you, Mr. Kubota and Mr. Chiyoda. If there is any problem, are you going to make an additional request to Nidec from PwC? That is my second question.
I would like to answer the question. This is Minai speaking. Thank you very much for your question. With respect to our company's internal management system, as a company, our opinion is that, please go back one slide. We have a Third-Party Committee through which we have received some issues pointed out by the committee. Based on those issues pointed out, we have come up with various specific measures as part of our improvement plan. We have completed our schedule as planned originally. We would like to submit our information to the Tokyo Stock Exchange to inform them of our current status. That is what we would like to do. All the measures were initiated by the Third-Party Committee. As part of this process, we have finished our work on our internal management system.
With respect to our current work and procedures, this is part of the required process. With respect to our audit, we need to find appropriate signers. We need to make sure that the signers are appropriate as such. We will have PwC people check these signers. We will go through necessary processes and procedures to make sure that our signers will be appropriate persons. We are going through the last part of the process to be able to obtain an unqualified opinion from our auditors.
Thank you very much for your question. This is Mr. Kubota speaking. I would like to explain this slide over here. First, we need to check if sufficient information has been submitted by the company. We will make sure to see if all the accounting reports, securities` reports, are all correct with the contents.
It is very important to have the reliability of the signatories, so that we would need to finish the verification of the successor's eligibility. For those signatories, you would like to verify that they have the eligibility. By verification, there are various ways of doing this, but this is a very important process as a company to go through this. This is the necessary procedure for the audit. We do not know the results yet, so that if there are new findings in this verification process, maybe there can be additional measures that we would like to request. First of all, we would like to ask the company, to go through this process. Thereafter, we would negotiate with the company.
Thank you very much. We will raise your question.
So for the person in the first row, the gentleman sitting in the first row. Yes.
From Kyoto Shimbun. My name is Ashihara. The first question is about, from Mr. Kubota, the verification of the successor's eligibility. We have the candidates, you say. I would like to ask Mr. Minai about it, but what kind of candidates are they? In which respect?
Well, basically speaking, for Nidec, we have various bases all over the world, but for those, the top person who are in charge of the management and those in charge of accounting and CFO, to put it plainly, and those people who are responsible for the management and accounting, that being CEO and CFO. Okay. Not President, but CEO and CFO, you say? CEO. Well, CEO usually is the President of each company's subsidiary. Yes. So the accounting and the management. Okay.
The second question is to the President. After Mr. Nagamori and the various past Presidents, you had decided to file lawsuit. Please tell us about the schedule of the lawsuit going forward. All those people, those had been very much contributing to the company, you are now going to file lawsuit. How do you feel about that?
Thank you for the question. Yes. This is a very heavy result to us that we decided to file lawsuit. According to the company law and the civil law, we are a company, has the person and the corporate law, according to the law and regulation that we will be proceeding through the Audit and Supervisory Committee and the Board of Directors meeting, we will be proceeding with what has been decided.
As for how we proceed, we would have other separate requests and decide on the schedule. Yes. We will be negotiating, talking with this person in charge of the filing lawsuit. Okay.
Yes. The person who is furthest from the entrance and in the front row.
Yes. I am Sato from Morgan Stanley Securities, and thank you very much for your explanation. I have two questions. One question is about the schedule going forward. I would like to confirm once again, and then last time you said by November 13th you will be having the financial reporting of the first half, but then you have the extraordinary meeting, and then for the five-year medium-term management plan that you will be reporting. As of our current situation, what kind of a schedule do you have in mind now?
Another thing is as of October 30th, about the internal management system, you will be filing the report to TSE and then TSE, when is it going to make a decision? Is it within this year that they are going to be making a judgment about that, or is it that it is quite difficult to do it within this year? This is what I estimate, but, well, can you tell us how you feel about this, the timing of this schedule?
Probably this is appropriate to have the answer from Mr. Nakagawa.
Yes. Okay. The internal management system report, as the company, basically speaking, within this limit by the law, we are doing at most. We might need to have this prolonged so that that is for the schedule.
Then we still don't have a concrete schedule about this as of now. Okay. About TSE's evaluation on this, after submission of the Written Confirmation of Internal Management System report? Yes. Written Confirmation of Internal Management System report confirmation, what happens after that is by the judgment of TSE and what they would say after that. From the company side, we cannot go into details. About the medium-term plan and about the shareholders' meeting after that? Yes. About the medium-term management plan, so that within the company we are progressing on that. In any case, so that we'll be having the modification of the financial reporting and based on this report, based on that timing, we would be making decisions on when to do it. It's not necessarily within this year. For the mid- to long-term plan, so that we would be having the modified financial reporting.
After that, we are going to have the medium-term plan at appropriate timing.
The second question is about this year, the fiscal year ending March 2027. We are having the explanation. JPY 2 trillion, JPY 2.8 trillion for the sales. This is electronics devices compared to the other companies. It seems that the growth is rather low compared to the other electronics devices companies. In the real business, because of the governance or the quality issue, is it that it's making its impact, or is it on the real business, the impact is rather light? We'd like to have your opinion on that, whether there's much impact or rather light impact. Okay.
Mr. Kazuo Nakagawa, please. Yes.
About the sales target, as we have set JPY 2.8 trillion, we should be announcing the first-half results, but we are still working on the quarter prior to that, so we have not integrated the figures yet. But looking at the business, it seems that we are going in accordance with the plan that we had already announced. About the quality issues that have happened. With the customers, we are negotiating and talking with the customers about how to cope with it. The sales, I don't think that it is going to decrease very severely. I'd like to ask Mr. Michio Kaida, but on the real business, there is not a big impact. Is that correct? Is that how you feel about this, as president?
Yes. Currently, with the customers, we are having various kinds of questions.
In that case, we have cash in place, and maybe they are worried, the customers are worried about that. Not to have their concerns, we are making explanations in a detailed way. AI-related business, we are having much AI-related business from the customers so that we would work to security, answer the request by the customers. That's what we are doing now. Thank you.
All right, anybody else with a question? Okay. The second row from the entrance. The sixth row, the gentleman sitting in the sixth row.
Yes, thank you. From TV Tokyo, my name is Kobayashi. I'd like to ask President Michio Kaida.
And you had said for the young people, we had amalgamated the young people so that you had come up with this Re-Definition declaration, so that you would never repeat the same mistake, so that you have a very strong opinion stated here. But for the younger employees, what type of mistakes do the younger employees believe that Nidec has committed in the past?
Well, thank you very much for your question. Last year, on October 28, our company's stock was designated as the Security on Special Alert, and we established an investigation committee. As a deputy chairperson of the committee, I worked with others to come up with the improvement plan that I mentioned in my presentation. With respect to this Culture Transformation Lab, we have members in the organization, and some of these members are from this Nidec Corporate Reform Committee. When we were formulating this improvement plan, we have involved all the people from top to bottom, and they are all proactively willing to write, raise their voices, opinions. We wanted to express all the issues that we have expressed to the front.
There are quite a few members like that, and not just in Nidec Corporation, but we have included many people from around the world to be part of this movement. These people did understand the reality of this company when writing this report. It says never to repeat the same mistakes again in the future. I believe there must have been a very strong recognition among these members when establishing this Forward message. What do you think was the major mistake? That's something that I would like to know. It wasn't really communicated fully to me. What type of mistakes do these people understand, and what type of events led you to make this press conference today? Please tell me about the mistakes in detail. We have quality-related issues, we have accounting-related malpractices, inappropriate practices, and whether it be sales, or operations, or research and development.
In the end, what we do will be expressed in numbers. Regardless of the size or scale of your work, you will be, in the end, evaluated in numbers or with numbers. So we all need to understand our work will be assessed based on numbers. If the numbers are not really good, you will be assessed very poorly. We need to understand that when our work was or has been converted into numbers, we realized that what we did was wrong. So all the companies, all the employees do understand. They have understood that what we did was not really appropriate. So we need to make sure that what we do going forward will be able to be converted into very positive numbers. That's what's behind this message over here on the slide.
There is one more question from me.
It says, the code of conduct for the revitalization of Nidec. To put it simply, what is your definition of revitalization, reform? What is your definition of these two words?
As I have said a few minutes ago, with respect to purpose and vision of this company, we are going to create these things, purpose and a vision, going forward. Still, in order to create purpose and a vision as a company, prior to being able to talk about these things in front of you, there are some things we need to go back to. A company is an institute of a society. We need to do basic things on a routine basis, whether it is quality, accounting, or governance. We need to be able to do these things on a routine basis, properly, naturally. We need to understand these methods first. That is the starting point.
From then on, we should be able to demonstrate our true strength as a company. We need to go back to the basics. That is what we need to do first. I believe the chances for you to be able to stay listed, and you need to be able to make further improvement. What is your definition of revitalization? What is your image of revitalized Nidec or reformed Nidec? What is your image like?
If you go back one slide. Please go back one slide here. One more slide back, please. Please take a look at the middle section there, purpose. It says purpose there, in the middle. This is something we all create together as a company, as employees, as a team. I myself come from an engineering background.
Our technologies and products are utilized all over the world, and we like to see smiling faces of all the employees as we talk to our customers and business partners. That is the type of atmosphere that we like to create in our company. Whether it is our products or technologies, we like to be proud of them. No matter which country we go in the world, we like to hear people praise about our products and technologies. That is the type of image that we like to get back. You would like to create such technologies and products first as a company together, collaboratively. We are in the second founding phase of our company. What I tell our employees, that we need to walk on our own feet. That is what we need to do first. Otherwise, we will not be recognized as a very good company, no matter where we go.
We have various young people. We have very good technologies with us. We have so many great customers around the world. It is to these people, to whom we would like to hear from them say, "Welcome back."
We have so many people in attendance today. We would like to limit it to two questions per person. The next person will be the lady over there, second row. From the second line from my side.
Thank you very much for explanation today.
This is Kiyohara of Bloomberg News. Here is my first question. With respect to one of the shareholders, Oasis Management, they are requesting you to start considering regarding the chances for your companies to be delisted. How are you handling such a request from Oasis Management? Are there any proposals for merger and acquisitions or delisting proposals from Oasis Management?
Are you going to planning to establish any special committee to discuss such possibilities? That is my first question. Thank you. Minai and Kaida answer the question.
This is Minai speaking. I would like to answer the question. Thank you very much for your question. First of all, I would like to say that, as you all know, we are working extremely hard to stay listed on the Tokyo Stock Exchange. Regardless of shareholders, we are receiving various opinions and proposals from various shareholders. When we receive them, we like to come up with very good solutions. We like to deliberate those proposals sincerely. Once again, I would like to state that so far, we have come this far, and we would like to stay listed on the Tokyo Stock Exchange. We would like to make sure of that. It is to that goal, we will do our very best.
That's what we are doing. That is all from me. Thank you very much. Here is my second question. With respect to commitment line contract.
With respect to this existing contract, do you have any agreement with the banks for extension of the contract? If you have that, please tell us about the commitment line. How much is the total of the commitment line that you had secured from the banks? If you can, please tell us what kind of financial institutions have given you the commitment lines. If possible, I'd like to know about that as well. Thank you.
Thank you for the question. CFO, Mr. Nakagawa, is going to answer the question.
Okay. Thank you for the question. Our company, as a commitment line continuation, yes, we are considering that. With the banks, we are negotiating and continuing the negotiation. As of now, we have JPY 600 billion and not used commitment line. We have the other contracts.
As to the details, I'd like to refrain from going into that. Thank you.
Okay. Any other person? The second row from the back, the gentleman with eyeglasses.
From Yomiuri Shimbun. My name is Kanai. One question to President Kaida. This investigation report about the responsibility of the officers about the 2020s, you have been having the risks pointed out in the company about the accounting irregularities. Mr. Nagamori's power has been too strong, so that had been the case. As from Nihon Densan, indeed, you have been the President for a long time, so I think you have been in the line of the accounting reporting. I don't think that you have a question about that. As one person of the group, about the accounting process, have you acknowledged the risk of the accounting?
Did you acknowledge the risk of accounting within the group? If that is the case, Mr. Nagamori, you had said that Mr. Nagamori had given us dreams. As one of the members of the groups, you had decided to file a lawsuit against this person. How do you feel about it?
Thank you for the question. How should I put it? I had been in the subsidiary company for a long time, and I had talked about the possibility of listing this subsidiary. Becoming a listed company means that we should be strengthening ourselves and to show our sincere selves in order to be a listed company. In that sense, whether we are listed or not, the numbers must be perfect. Numbers must be clean. As I said, what we had been creating would be reduced to numbers in the end.
In that sense, we want to be clean with the numbers. I acknowledge myself that I had been that way. As for the investigation committee's report about the responsibilities, liabilities of the officers, I had seen for the first time many new facts. On page 223, there has been reporting of the investigation committee, but those kind of things must never happen, actually. For the board of directors and also for the Audit and Supervisory Committee, that has been decided. I have no quarrels about that. According to the law, we should proceed accordingly, in a correct way. As for filing lawsuits, do you have any personal emotions about it, feelings about it? We are salaried personnel, so we must be equal under the law. In that sense, we don't have any kind of such personal feelings.
Company is a corporate entity, so that we are asked about the corporate person, and then that is what we should do as our duty.
Another question is to PwC. I want to confirm with you. We don't have any unqualified opinion about that. For a long time, you had not come up with the unqualified opinion, and then there has been additional requests that you have put forward in October. You are still going through this, and for a long time, you were not able to have the credible trust. I think you had not been able to put forward the unqualified opinion, and you have the disclaimer of putting forward the opinion. From the PwC, we decided for the disclaimer. What is the distinction between these two states?
Yes. This is an auditory kind of a. Not appropriate.
Inappropriate means that the numbers are inappropriate, the numbers are inaccurate. Not having the disclaimer of opinions is that whether the numbers are right or not, we have no accounting evidence, audit evidence, so that we cannot have the disclosure. The current situation, we cannot say that it's inappropriate or not because it's not whether it's right or wrong. But we don't have enough audit evidence, so we say that it is inappropriate. Thank you.
Okay, anybody else with a question? All right. The gentleman sitting in the front row.
Yes. Thank you. My name is Hiraoka from Nikkei Newspaper. I'd like to ask PwC.
As of September end, in the press conference on October 1, the company and PwC said that there are those challenges going forward, but in order to have the opinions from the auditors, I think that you were in accordance with what is necessary. On October 19, there has been additional requests. What is the reason that you needed those additional requests? That has been going through the Third-Party Committee, and there has been investigations through the Third-Party Committee. Why, in that kind of a timing on October 19, you decided to request additional information?
For the auditory process is that we would have the auditor plan first, and according to the plan, we are going through the procedures.
If, as a result of the procedures, if there's anything that has happened unexpectedly, then we would need to ask for the additional request. In the press release, it's revealed. In October, we had in the process, new findings that we needed to consider, so that we decided to enlarge the scope of the audit. That is the procedure that the companies are going through, and then the auditory, ourselves, should need to verify those. Thank you.
By the procedure, then as soon as possible, you're going through the audit process, I think. After November, would there be additional matters that you would need to request so that the scope of the audit can be enlarged?
Yes. There is possibility that can happen.
My second question is, I might not have known this very well, but 252 screening people, so that on the specific condition, there are 132 people that you're working on now, so that you had written. That specific condition, can you go into what kind of a condition that entails?
Thank you for the question. Basically speaking, in the past, those people who were investigated in the past or what kind of a base they were in. It depends on that. The conditions are different. Is there any people who had falsely reported that there's a specific line? It's not that there's any specific line. The procedure we are doing is to verify whether that has happened or not. Thank you. Any other question?
Near the entrance, the second row, the gentleman sitting in the second row near the entrance.
From Toyo Keizai, Oriental Economist. My name is Kojima, and the first question is about the company to Nidec. Mr. Nagamori to exit as a company from Mr. Nagamori's company, you said in the Third-Party Committee. Mr. Nagamori is a big, large stake shareholder. Of course, you have personal relationships with Mr. Nagamori, I'm sure. Mr. Nagamori's company, so you are going to exit as a company held by Mr. Nagamori, so that you're not going to go into contact with him?
Has there been any pressure, and you would like to avoid such pressure from now onward? Are you going to completely disconnect your connections with Mr. Nagamori going forward? Is that what you are saying?
I believe one of the persons from Nidec has been executive members of Nagamori Foundation. Can I clarify those points, please?
Thank you very much for your question. Minai, can you answer the question?
Yes, this is Minai speaking. I would like to answer that question. With respect to this departure from the past, we need to prioritize righteousness. In other words, we need to prioritize what is right for us. Please take a look at the slide on the screen. We have been sales-oriented as well as profit-oriented so far. We will depart from this style to prioritize what is right. We have cherished many other things. We will restart cherishing these elements. We are currently trying to identify which item, which elements are important for us. As has been explained by Mr. Kaida, we need to be independent, and we need to regain trust from society, and we need to understand what we need to do to achieve that goal.
We are having these discussions with various employees as part of a Re-Definition declaration as well as part of this Forward message. In the end, we would like to establish a new purpose as part of our new corporate culture. Mr. Nagamori, the founder of our company, has nurtured his own management method. We will reset it.
We would like to create our own new corporate culture going forward. It's not just about Nidec Corporation. We will involve subsidiaries and affiliates inside, as well as outside of Japan. This is how we like to establish a group-wide common corporate culture.
With respect to Nidec Instruments, Mr. Otsuka, he was a Director of Nidec Cultural Foundation, and he seems to have resigned from office. Is there any information that you would like to tell us about Mr. Otsuka? Nidec Instruments itself is now under the new business management style. Here's my second question, and my second question is for PwC executives. Since Nidec has received a disclaimer of opinion for two consecutive fiscal terms, I believe one thing you could do as an auditing firm is to provide Nidec with instructions, guidance to make sure Nidec will be able to conduct business in an appropriate way.
Still, for the second time, Nidec has received a disclaimer of opinion. Did you expect this situation to last this long as far as Nidec is concerned? Would you say that Nidec's internal management was worse than you'd expected?
Thank you very much for your question. As I've indicated a few minutes ago with respect to the plan going forward, if there is no new findings, this entire process may have ended earlier, but there were some new findings, therefore, the situation is now continuing ongoing still. Thank you very much. The person from the second row. Thank you very much.
This is Uematsu of Nikkei Newspaper. Here's my first question, which is for Nidec executives. If the current situation continues, if you cannot obtain the unqualified opinions, you have to submit Written Confirmation of Internal Management System without an unqualified opinion.
I believe this message has been already conveyed from your company to TSE. What type of reaction are you receiving from TSE? Are they setting up a specific target, a specific date for you to have to receive unqualified opinion from TSE? What type of reactions are you receiving from TSE or Tokyo Stock Exchange?
Thank you very much for your question. This is Minai speaking. I would like to answer the question. With respect to the status of our audit, we are communicating with Tokyo Stock Exchange personnel with respect to those points that I have just mentioned. We have this target date of October 30th for us to submit a Written Confirmation of Internal Management System. We have explained this point to the Tokyo Stock Exchange personnel as well. In the conversation or discussion with them, we are communicating various issues with them.
Unfortunately, we are yet to be able to receive an unqualified opinion from our auditing firm. That we have explained to TSE personnel as well. With respect to TSE's opinions of this current situation of Nidec, we are not in a position to comment on their opinions. I would like to refrain from making any comments on that point regarding TSE personnel's feelings or opinions. With respect to TSE personnel, I do not think they are rather optimistic. I believe TSE personnel believe that they would like to know more about Nidec's situation as quickly, promptly as possible. We would truly appreciate your explanation because this is of the interest of shareholders as well.
I would like to ask next questions to you, Mr. Kubota and Mr. Yoshihisa Chiyoda. Do you have any intention to issue an unqualified opinion as an audit firm?
In a previous press conference on October the 1st, the statement was made from the Nidec side as well as PwC side that the issues have been already identified, and what we need to do is to address and solve those issues. Still, a few weeks later in today's press conference, you said you have found new issues.
As of October the 1st press conference, at least, Mr. Masataka Kubota, you said that it is your responsibility to issue Nidec unqualified opinions. That is the first thing you said during the press conference. In today's press conference, from the beginning
There have been many similar questions from us in attendance, reporters. You said that there may be more new meetings. You sound as if you are explaining an excuse first. Do you really think that you have an intention to issue Nidec an unqualified opinion as an auditing firm? Do you think that you will not really have anything to help Nidec with, even if Nidec once again fails to submit appropriate information? How come you are sounding as if you are saying no end to this current situation as far as Nidec is concerned?
This unqualified opinion should be issued based on appropriate evidence of information. That opinion remains unchanged. We will continue to audit Nidec until we receive appropriate information, accounting information, financial information from Nidec, and we will fulfill our agreement and our contract with Nidec as long as it lasts.
We cannot express our unqualified opinion without receiving appropriate amount of appropriate financial information. We are discussing, and we will continue to discuss how to go through this kind of situation. You have this request made to Nidec. I believe you are currently waiting for Nidec's response to that request. Of course, no one can be really sure about what is going to happen next.
You have in the request to Nidec within the matter of concern, so that if you have that response, then you can start the process as soon as possible, so within November. If you have the response, then you can have the unqualified opinion. Is that how you look at the situation?
Yes. What we had requested is to have the audit evidence. Yes, we do need to have this procedure in order to have enough audit evidence.
So as soon as the documentation is submitted, then we would proceed so that we can express our unqualified opinion. So by the year-end, or let's say December, we might say the same thing again that there are new issues so that they have done the homework, but then there are other issues so that we cannot give unqualified opinion. So that kind of a probability is rather low, you think? So whether there can be new issues, we have to go through a procedure so that I refrain from making a comment on that. Thank you. Okay. Any other question? Yes. All right. So person sitting in the back.
Yes. Thank you. My name is Naito from Misty Group Securities. So I'd like to ask PwC executives and then the disclosure on page four, the second point.
So that you had the screening of the procedures, and then you have additional issues, so that 252 people. Is that the same thing that you need to go through? And then if that is the case, I think this has been the same question back and forth, but the PwC side, you have this last instance that you need to straighten. And then last time about the asset impairment and those valueless stocks of the related companies. So you need to check, has that gone forward? Or even for those matters that you do not have enough materials in order to perform your audit. Please tell us about that.
Thank you for the question.
And I think it's page five, that the first question that you have raised is the additional emails and the screenings, and that is the 252 people that we need to go through. Yes. So that is in the release, right?
Yes.
Okay. On page four, I think on the second bullet point of page four from the Nidec side, I think. But this screening, there has been additional issues.
Then on page five, three , is that the same thing?
Yes. Yes, that corresponds.
Okay. All right.
And as impairment loss, I think there's been an explanation from the company, but we are still negotiating with that. Yes, it is progressing, but we are still having discussions on that.
Okay. Thank you.
And another question to President Kaida about the medium-term management plan.
You are saying that you are progressing towards that, but as for the medium-term plan, after you have become the President, well, I think you're still new as a President, and you are still busy with the auditing process. But then the prior President had said, has there anything that has changed? Or is there anything that you want to prioritize or anything that you want to change from the previous President? So if there's anything that you can indicate, please tell us.
Okay, thank you for the question. Well, I'm still a CTO. I have been CTO, and half a year ago, within the company, I have been looking at the asset and technology within the company to have the valuation. And within the company, accordingly, in order to come up with a medium-term plan, there is a project going on.
As a group, as a whole, we need to have the earnings power data. We started that process half a year ago. Using that as our base, as we have put forward here, can we put the resources, invest, and what are the giga trends, that we have a very big giga trend. Which resources that we are going to allocate or reallocate? That kind of a negotiation is now currently ongoing.
Okay, thank you.
Yes. Any other question? All right. Near the entrance, the second row, the lady sitting in the second row.
Tokuda from Toyo Keizai. For the accounting and the managers, I want to have the signatories, about the signatories, in several cases that there needs to be a reshuffling of that, but where are you going to have the new people?
Are you going to have new people from other parts of the company? I do not think it is something that is so easy. Not so easy. It is not just in form, but to have the real substance in order to have the real accounting. What are the steps that you are taking to ensure that?
Thank you for this question. From Mr. Minai, please.
Yes, thank you for the question. Yes, in various countries and various positions, how do we go about it is quite varied ways. Let us say that somebody came up to a new position, and I think it can be a big new opportunity. That can be one smooth way to go forward. To look at who does what and look at the organizational structure, review the organizational structure is one way of doing it.
In accounting, the person in charge of the accounting. We would need to have a new person there, and then ask that new person to do the job responsibly. We would need to have somebody who are very knowledgeable about accounting to support the new leader. Other than accounting, then that person who can go and shift to the other areas, then in the overseas organizations, well, of course, within Japan as well, but to have new people that we would take up and put in these positions, in a rapid way that they would be learning quickly, so that we are going about it in that kind of a way.
All right. In the group, the major subsidiaries, there has been changes at the top recently. But those are the signatories over the verifications for the successors' eligibility.
Is that a part of that?
Yes. That is also a part of it. We are looking at the positions, reviewing the positions at various companies.
Second question about to Yoshii.
Yes.
Third-party committee. You had joined Nidec last year, June, and then have you had any cases, instances that you had feelings that there has been no adequate opinions come out, unqualified opinion? As your position, what kind of a feeling or what kind of opinion do you have about your position?
Okay. I came here last year, and yes, for the inappropriate accounting that we had a doubtful process, we had the Third-Party Committee. As one person that is responsible for that, I had been asking for a correct investigation. Even if it takes time to look at all the questionable accounting irregularities. Yes.
In March and April, we had the Third-Party Committee reports we had received. In the financial accounting, we need to go through the accounting restatement with PwC Japan LLC in a reliable manner to have the restatement of the financial accounting. As the Audit and Supervisory Committee, there has been much modifications needed.
We are currently focused on the current situation, and we are making a lot of issues to PwC Japan LLC executives. We are having the hearing session on a monthly basis starting from March this year. From this past summer, from this September onward, on an almost weekly basis, we are inviting them to our Audit and Supervisory Committee meeting to ask for their opinions to improve Nidec to be a better company.
Okay, thank you very much. Next person, the person from the fourth row from the front. The person wearing glasses.
This is Sei of Asahi Newspaper. My first question is about eligibility check of the person who is in charge of the preparation of the financial report. As you talked about the numbers, such as 20, as the number of people during the October 1st press conference.
According to this press conference material today, it is 77 people from 55 different countries. What made you have this change? It will be a problem if you gave us the wrong information and turned up in the public. With respect to PwC Japan LLC executives, I believe this eligibility check, is the largest issue in your opinion, or do you have any other bigger issues than this eligibility check related issue? That is my first question.
This is Minai speaking. I would like to answer the question on behalf of the company. Thank you very much for your question. With respect to the 20, 30, that is the number we gave you as of the end of September. Here is the difference between these numbers and the 77 people that I gave you today.
With respect to 20- 30 people, those that are accounting managers, they needed to be subject to transfers internally. Back then, at the end of September, 20 - 30 people from four countries around the world. That is the number that I gave you at that time in a previous press conference. After that previous press conference, we had some procedures for the transfers to select successors to these people. We, as a company, are now fully prepared for those transfers to complete. With respect to the gap with the new number, 77. These are the people that are related to the eligibility of the signers. This is not an issue related to the aforementioned accounting manager related issue. We need to make sure that these people will be necessary for us to obtain evidence necessary for us to submit our financial statements or report.
If I am wrong, please let me know. In other words, you did not disclose to us all the information last time. Is that what you are saying?
Well, back then, there were some issues. The managers, accounting managers, 20-30 people from four countries, and that was as of September 30. According to this release, numbers 77 was already pointed out to you as of the end of September, according to the press release. Back then, the number of the country was limited to four countries, and 20-30 people needed to be prioritized. That is the number we started with. These are the people, 20-30 people, were the people we needed to prioritize in order for us to obtain an unqualified opinion from our auditing firm. So these are the number of the people who is part of the remaining issues.
I understand that you did not disclose all the information back then. PwC executives, I believe this is just a matter of points to be emphasized and not to be emphasized. Impairment losses, as well as identifying the people who have been involved in the various issues in the past. We are having these ongoing investigations into these points. With respect to these numbers, the situation remains unchanged. My next question is about impairment losses. With respect to this presentation material, based on discussions with the auditors. With respect to the fiscal year that ended in March 2026, there were some corrections. There are some corrections being planned, and you are receiving some kind of audit by the auditing firm. What you are saying as a company is that there is JPY 28 billion, JPY 630 billion, in total is JPY 900 billion in total for the past fiscal years.
The allocation will change, but the total number, total amount will remain the same.
Is that what Nidec is saying here? To PwC, I would like to say that it says there, based on a negotiation with the auditing firm, if the amount remains unchanged, do you have already given an approval of the amount?
This is Mr. Kazuo Nakagawa speaking. I would like to give an answer to that question. With respect to this latest accounting corrections, equity, et cetera, will not be subject to any specific heavy impact for the fiscal year that ended in March 2026. We have had some rationales with respect to our plan for the past fiscal year. That is what we are currently examining. We are checking the impact of making these changes, and there are some changes to be made to the amount.
Did you say there is a chance for these amounts to be changed?
I am talking about the impairment losses for the fiscal year that ended in March 2026. Calculation is already completed, and a number has been submitted to the auditor firm.
How about the number, JPY 900 billion? Can it change? I would like to check, is that the correct understanding of PwC executives?
Yes. Currently, the audit is ongoing. No matter what results may be given by Nidec.
Next question. The person in the second row from the front.
This is Takahashi of Bloomberg. I would like to ask you two questions. First, with respect to Oasis. A proposal from shareholders, and you said that you will consider such proposals in order to maximize the company's corporate value. Have you already examined proposals from Oasis Management? I would like to know more about this proposal with respect to Oasis Management.
Minai-san, please.
This is Minai speaking. I would like to answer the first question. Let me reiterate that, first, what we need to do is to understand what we need to do is to stay listed on the Tokyo Stock Exchange. Also, we need to be able to maintain a very good internal management system. It is for these two goals we are doing our very best as a company. There are quite a few proposals from individual shareholders. I am not going to details about those individual shareholders' proposals. Sorry to repeat myself. Does that mean that you have not reviewed that within yourselves? Considered that within yourselves? Well, I am repeating myself, but, yes, to maximize the corporate value, we are having various considerations. So as for the individual matters, I would like to refrain from commenting.
Okay. Thank you. The second question.
You to become independent listed company, the basis for believing that you can continue growing. So for the basis foundation for the financials and where is the basis for you having a confidence as the President of this company?
Thank you for the question. To be significant as a listed company, the market discipline, we need to have the reforms going forward. As a matter of fact, by having a business, the progress as a going concern that we are going to disclose is how are we looked at from the outside. So for the company employees, I think it is a good way of doing things. There is a merit. Also to have this wide power to have the capital from outside, yes, I think there is a merit to it.
So to have the corporate value to be improved, yes, to have that steadily going, as a transparent financial situation, yes, I do believe that that would be connected to the growth of the corporate value.
Yes. Okay. Next question, please. Yes. The gentleman in the front row near the entrance.
My name is Takeuchi from NHK. Yes. There has been questions about this, but first question is about the TSE, the verification to the TSE and this internal management system. You said this is in security in place, but the audit opinion, there is no unqualified opinion from the auditors. In order to keep being listed as Nidec, how do you see this situation? As for the TSE evaluation, you said that you cannot comment on that, but I do not think that they are saying there is no effect. So how is that? Okay. Yes. All right.
I would be answering the question for Minai. First of all, we have the improvement plan. Those items that we have put forward, we had spent one year doing that. The internal management system, from that kind of a perspective, I think that we had completed on that and had started implementing that, and we are going through the screening of that TSE. That is why we will be submitting this on October 30. After that, how would TSE evaluate us? We must be quite sincere in having their evaluation. On the other hand, having no unqualified opinion from the auditor, this is something that is separate from the TSE screening and that other people have been much concerned about. Yes, I do acknowledge that.
We would like to be sincere in going this, so that we would need to have unqualified opinion as soon as possible, so that we can have you not so concerned about this, and to show you the financial statements, and to go through the requests from PwC, so that we can provide the information, and that we would be cooperating with the auditing process so that we can have the unqualified opinion as soon as possible. To maintain being a listed company, so that you are looking forward to that, but are you confident in this process? Yes. For one year with the employees all over the world, we had been doing this internal management system report, so that the current situation, we feel we must be sincere in putting forth the explanation.
The second question for myself is, 77 candidates for signatories, the management representation letters, so that those have been internally transferred, so that there has been the mail screening also. But would there be any other people that are subject to internal transfers? How do you see that?
Yes. Minai would be explaining about that for the 77 people, so that we have the new management system plan, so that we would verify that, and then to go to PwC to verify that. As we have put in this document, our side of work is complete. 252 people, as we have said here, the new requests that we have had received, and what kind of a procedure are we going to go through these 252 candidates?
We would need to have the cooperation, and we need to negotiate with PwC also, so that we are now putting the necessary procedures in place. Okay. The gentleman sitting in the second row.
Yes. From Nikkei Newspaper. About the digital forensic. I would like to ask Nidec and also PwC. The digital forensic for eight current officers, it is requested by the auditors. I would like to ask PwC. Based on this report, is there a possibility that there are some people who have issues? If that is the case, who would that be? For the eight current officers, is there a high probability that there would not be any concerns about that? As Nidec, as for the results of the procedures, would there need to be new personnel measures or to have the transfer in the management?
So that is my first question.
Thank you for the question. I would go into this from PwC side. As we had put in this slide, on October 27, we had received that, so that we are still going through the process about the re-verification involving those individuals. From Nidec, the same situation, so that we are completing the procedures, and we had reported to you so that we would have the verification from the PwC side.
As for Nidec, I would like to ask additional question, so that are there any internal transfers or are there new directors coming in? Is there a possibility of that happening?
We are still going through the process that we just finished this reporting, and we are having the verification by the PwC.
That I think it is quite difficult to answer your question that is under assumption. To the second question to PwC, the relationship between the unqualified opinion and the signatories to the management representation letters, so that there has been the additional procedures so that in the 300 subsidiaries, such as Nidec's position, so that you would need to have the management verification from all those subsidiaries.
Do you really screen down through this so that if there is anybody that you needed to have one person who cannot be verified, then you cannot have the unqualified opinion. The change in the signatories, or is there any possibility that that can be done?
Thank you very much for your question. With respect to the managing confirmation report, we will be receiving from certain subsidiaries, not all of them. It could be one person or one subsidiary. It all depends on the circumstances, depends on the scale of the company or position of the person. We will make judgments based on the situation going forward. If you cannot give an unqualified opinion of the entire Nidec group, if even one person is not qualified, or if one person is a member of a very important subsidiary within the Nidec group, the impact could be group-wide, and other alternatives could be possible in other cases. Thank you very much for your comments. The next person.
The fourth person, lady over there, fourth line.
This is Kondo of Asahi Newspaper. I would like to give you a question regarding the litigation against these nine individuals. No outside members of the board of directors are included here. In the investigation report, these outside members cannot be made responsible. I would like to know more about the basis or rationale of this thought. Even if you cannot make these people responsible, outside board members responsible, still, I believe they can be responsible for the supervisory roles. That is my first question.
Thank you very much for your question. This is Mr. Yoshii speaking. I would like to answer the question. With respect to outside board members and as to why these people were not really subject to accusations for illegal roles, issues related to problem related information was not really communicated to the Audit and Supervisory Board or Board of Directors.
Based on the scale of the earnings report, the level of responsibility is decided for each of these executive members, and that is the very basic notion about our investigation report. With respect to earnings report in process, the more central role that you played, the more or heavier responsibility you have to be accused of. The situation in the past was such that it was very difficult for a problem as well as issues related to information was not really easily communicated to the board or the committee. This is why no outside board members are being accused of any illegal activities here. With respect to the functions of these outside members, as has been mentioned by the report by the Third-Party Committee, I do understand that these outside members did not play their roles as outside board members.
By the shareholders meeting in June, I was given one more year as outside members of the board. All the other outside members of the board resigned from office as of the shareholders meeting in June this year. Outside board members did not have enough expertise or knowledge about accounting-related issues. In the transparent and fair processes, we should select people to be members of the board of directors going forward. Thank you very much.
With respect to my second question about this amount of damage or damages, it says that the amount may increase in the future. What type of expenses may increase in amount in the future? Is there any chance for these amounts to increase significantly in the future? Since it is the violation of the distributable amount, if the quantification is completed, is there any additional amount to be added to the amount to be requested to these accused individuals?
With respect to past cases, with respect to penalties to be issued by securities commissions, those are part of the damages to be requested. There is a chance for such cases to occur, as you have mentioned. We have selected procedural attorneys. We will have a very good communication with our procedural attorneys based on, among other issues, differences with the other past cases. With respect to illegal dividends, we need to first have amounts finalized. We need to have a very solid basis for us to make a judgment. I believe that was the case in the past.
After the quantification process is completed, we will go into a litigation phase to recover money as a form of damages. We will talk to have the specific expertise based discussions with our procedural attorneys. Thank you very much. Next person, please. The lady in the federal.
This is Hagiwara of MBS Broadcasting Corporation. I would like to ask you a question, Mr. Kaida. The deliberation by TSE is going to start. How do you feel that you are still yet to receive the unqualified opinion from the auditing firm? Thank you very much for your question. Of course, we need to have an on-site visit by TSE personnel. We did some preparations for the visit. We will submit our Written Confirmation of Internal Management System. Internally and externally, we got together to make necessary preparations to submit the written confirmation.
I'm not really sure what's going to happen in the future exactly, but we would like to make sure to be fully prepared to be able to accommodate the on-site visit by the TSE executives or personnel. Thank you. Next question, please. The gentleman over there, second line from the entrance.
This is Nishizaki of TV Tokyo Broadcasting Corporation. With respect to the departure from Mr. Nagamori based company, Kaida-san may ask you the same question. With respect to the current Nidec, do you think you are making a successful departure from the Mr. Nagamori style management? What needs to be done? What is the most critical element for you to make the successful departure from the past?
As I've said several times already, back in October, we established this Nidec Corporate Reform Committee. In our improvement plan, we have identified the causes of the past problems and issues we have experienced. Internally, we got together to discuss those issues from the past. We kept all of this in mind as we went forward since then. We are in the so-called second founding of this company. It's not going to be so easy as a process. We need to embark to make a departure from the past. We need to establish our own new company, ourselves.
In that sense, I think that we need to be strong on our own feet. Are they really secure? I think we still have much way to go, but in domestic and also overseas, we have 100,000 personnel, 100,000 employees, so that we need to walk on our own feet. That kind of action, I think we are already beginning to take.
Thank you. Another question to President Kaida. You have been the president of AREIT. You had personal contacts with Mr. Nagamori, but Nidec, in such kind of a situation, Mr. Nagamori, when has he made what kind of a mistake, according to your opinion?
Well, thank you for the question, but in that kind of a perspective, I have not seen the current situation. But, well, let's say To have the dream, to chase the dream. I think that is what Mr. Nagamori did. But it is not that having a dream is not good, but to have our own maturity, I think that had been what is necessary. But then governance, I think that was weak as a system, so that we have many companies all over the world, but we did not have enough nerves, let's say, the governance inside that system. So that we were slow to come up with the governance system. That is how I see it.
Okay, thank you. All right.
Any other questions? The person near the entrance, the third row. Gentleman there.
Okay. My name is Mori from Toyo Keizai, and I want to confirm the facts. on August 5, you decided to file this lawsuit.
So those nine people, I think, and those nine people, and the nine people that we had decided to file, are they the same people?
Yes, this is Yoshii speaking. Yes. So by having the request to file a lawsuit, and I like to refrain from naming those individually, but generally speaking, those nine and the ones that we had filed lawsuits are different. And I think this is as of today, but we had decided to have a lawsuit, but then there are some people who were not filed. So, yes. Okay. So some had been requested, but then some people who were requested on August 5, there has been some people who are not litigated. But this time around, we have some other new people.
Okay. So to have the class action suit.
Yes.
Okay.
But another thing about the distribution and excess amount on September 30, so that we had JPY 235.6 billion, I think, of the 32. That is also part of the damage?
Yes. Abstractly speaking, yes, it can be damage. But as I said, so we are going to recover the damage. That is a perspective that we have. So that with the procedure attorney, we are going to discuss this. So what kind of item, so what kind of distribution that is possible. So we need to precisely account for that. So we will have the necessary and sufficient amount that we will be asking.
Yes, right. Of course.
As for consideration, that can be zero. Yes. There is a possibility. But yes, we need to have the damage recovered, and then we would file for the lawsuit.
Okay.
That row, the person with a cap.
From Gekkan Facta.
This is Miyajima speaking, and I had made many questions in the press conference, so I had been quite expectant. As a result, I think by this investigative report, I think that those people were going to be filed lawsuit, so that those people must have exited the company. Is that the correct understanding? This is the investigation of the executives that has been subject to Yes. I'd like to ask President Kaida. With that in the background, from Mr. Kishida to Mr. Kaida, is it really like all right, as such. This is my frank opinion. What I'd like to ask is that as a company, we are going to litigate those nine people, so that there is going to be some kind of a, let's say, the weight of their management responsibility. How do you understand?
The one that is at the top, Mr. Nagamori, and let's say that Seki-san, who had quit after several years, are quite different actually. How, in what kind of a design, are you going to have a break from the past? It's nearly JPY 30 billion amount, but I'd like to go into the content of that. For those nine people, how did you decide to break with the past, in what kind of a weight? At present, we are going to have a lawsuit, file a lawsuit. I'd like to go into the content for the claim of the damage. The investigation report, I think there's been one wolf in the herd of sheep, so I think Mr. Nagamori should be responsible. Otherwise, nothing would change. By filing a lawsuit, how do you feel about it, Mr. Kaida, as the president?
Thank you for the question. Personally speaking, no, it's not something personal that I'm going to go into. As for the acknowledge about the responsibility or the amount, no. There has been the board of directors and Audit and Supervisory Committee meeting, so that you had certain amount of design in order to come up with this decision on filing a lawsuit.
Were you very concerned about delisting?
This is what the company have to make a judgment. Is Mr. Kaida had really had a clear break with Mr. Nagamori, but you had been in this company for 40 years. In order to have a break with Mr. Nagamori, this is a lawsuit. Please tell us more about this, why you decided to go into this in order to break with the past.
As I've been saying this many times over and over again, the same thing, this is based on the law and fact that we had made a decision. This is through the Audit and Supervisory Committee and the board of directors meeting that we had made this decision, and I decided to agree with this decision.
Okay. This is lastly speaking, but because on the Article 423, but originally 33, this is really in violation of the breach of the duty of care. I think Kaida-san, also, the breach of the duty of care, I think that you are also liable to that. Are you really having the responsibility for this breach of the duty of care? Because it's going to go into litigation.
I think, clearly speaking, Mr. Kaida, in the five years' time, media has been reporting that there is something going on in Nidec. Where were you when this was happening within this past five years or so? Did you really know nothing about it? I think about the breach of the duty of care, I think you really had issue with that. Do you really acknowledge that? That is my question. How do you personally feel about it?
With respect to the Executive Responsibility Investigation Committee, we receive these level of responsibility very heavily. Yoshii-san gives you some additional information here. These nine individuals are subject to the damages that were incurred in the Nidec's head office. Former board members and former corporate auditors are the main people, and those who have been with the company over the past five years. Among these people are indicated here on the list. Vice Presidents, CFO, the last person on the list is one of the persons whose responsibility we have discussed.
One more thing. Once again, I would like to ask you the same question. Mr. Kaida, can you prove that you have totally departed from Mr. Nagamori? It will be a departure successful enough for you to be able to litigate these nine individuals, especially Mr. Nagamori.
There is a significant difference in the degree of heaviness or responsibility between Mr. Nagamori and the rest of the people. Can you ask a question instead of a comment? Please ask them a question instead of a comment. You are accusing Mr. Nagamori. I want to wonder, how well does Mr. Kaida understand about the heaviness of the responsibility of Mr. Nagamori? That is my question.
As the leader of the company, we have worked on the improvement plan to make this a departure from Mr. Nagamori's way of doing business. The Audit and Supervisory Committee will go through this deliberation process. Next person, please. These 4 people will be the last people to ask questions due to the time constraints. The person right in from the previous person.
This is Iyama of Kyodo News Agency. One thing I would like to confirm with you.
You have gone through some personnel disciplinary actions, including transfers. Does this decision include some demotions, maybe?
This is Minai speaking. I would like to answer the question. We have been implementing various disciplinary actions based on how much involvement he or she has been proved to have been subject to. Demotion is one of the options as part of these disciplinary actions. Next person, please. The person over there, second line, second row, in the second row. A lady over there.
This is Azashima of Diamond Magazine. Thank you very much. I have one question to you, Minai-san. With respect to the previous President, Mr. Kishida, he resigned from office, as I understand. As of now, he is no longer a member of the board either. That is correct. He is no longer a member of the board.
He resigned from office as both President as well as a member of the board as of September 26. Thank you very much.
That is correct. Yes. Thank you. Two more persons to go. The person over there, the second person. The person in the second row.
This is Kawase of Nikkei Newspaper. I would like to ask these questions to both Nidec as well as PwC personnel. Nidec has regarded PwC as an organization too easy to deal with. As of now, between Nidec and PwC, is there a sense of trust, mutual trust between each other? What type of relations are you having between the two, Nidec and PwC?
Thank you very much for your question. We mutually understand each other's positions. We are having a very good distance from each other, in my understanding. If I may add some information.
We have Audit and Supervisory Committee, and we have an internal audit department. We are in a collaborative relationship to make sure no problems will occur. That's the type of supervising we, all these three organizations, need to do. Based on this policy, we are establishing a very good relationship with PwC. If I may answer that question as well, because we need to secure the independence as an audit firm. That's the type of existence based on which we are having this very good mutual relationship. Here's my next question to you, PwC executives. The Certified Accounting Organization has expressed its regret about the lack of unqualified opinions issued to Nidec. With respect to the CPA Association, that's an organization different from us, and I'm not going to make any comment about this specific organization, but I take this situation very seriously.
Here's the final person over there.
This is Kato. I'm a freelance journalist. Here's my first question. With respect to the responsibility of outside board members, can I ask your opinions about outside board members? You're not going to sue these outside members this time, but individual board members should be responsible for the lack of sufficient supervising of the business operations. Information, communication, Corporate Governance Code, active information gathering are truly required of these outside board members. If you are not suing any of these outside board members, these outside board members will be able to get away with whatever Nidec is being accused of. Can I ask your opinions on this?
If I may, this is Mr. Yoshii once again. I truly accept this responsibility of outside board members very seriously.
Once again, if I may, we have this negligence, a lack of sufficient supervision, truly important facts that we need to take very seriously. The responsibility of those people who have been involved in audit is more than other people. In the past, there is a corporate structure in which we won't easily communicate issues to the top, as has been expressed in the Third-Party Committee's report. That way, board members cannot function as such. Once again, I would like to say regarding this point, from now on, we would like to have a very good supervisory function to select appropriate type of people on the board.
Mr. Kubota, I would like to ask you a question. Nidec has been subject to unqualified disclaimer of opinion for two consecutive fiscal terms.
The market may say that you should be resigning from office or resigning as an outside auditor because you are not really fulfilling your responsibility sufficiently enough. I believe the sense of trust is being lost more and more about auditing firms. Therefore, to the market, would you like to say anything as an explanation?
Thank you very much for your explanation. As I have said, as far as we are concerned, we need to express our auditor's opinion based on specific and appropriate auditing and accounting evidence. One more thing in relation to this point. You have to be able to supervise Nidec. The two years seems to be very long. It depends on the circumstances. I need to express our auditor's opinion based on appropriate auditing and accounting evidence. That is the heaviest responsibility as an auditor.
All right. Thank you. Okay, as such, we would like to conclude the press conference. Thank you very much for coming to this press conference. Thank you.