The Nikkei 225 index has increased by 5.12% this year, whereas Nidec shares have decreased by 10.61% during the same timeframe. Nidec Corp’s shares experienced a significant decline of 22.44% on Thursday, following the company’s announcement regarding an investigation into allegations of improper accounting within its group.

This represents the most significant single-day decline in the shares of the Japanese electronics components manufacturer. The company based in Kyoto stands as one of the largest global producers of mini or brushless motors, which are utilized in devices such as hard drives, as well as in larger motors for electric vehicles, appliances, and factory robots. Nidec Corp shares Nidec announced the formation of an independent third-party committee on Wednesday, following an internal investigation of its Chinese subsidiary, Nidec Techno Motor, which uncovered evidence indicating that the malpractice may be associated with its management.

“The investigations uncovered several documents indicating that, alongside Techno, the Company and its affiliated entities may have participated in questionable accounting practices with the awareness or involvement of their management,” Nidec stated. Nidec has recently made an announcement following the postponement of its financial report submission in June due to “potentially erroneous declarations” regarding the country of origin for the manufacture of specific motors, which could have led to unpaid import tariffs.

Nidec operates in multiple countries, such as India, China, France, Germany, and the United States. The company has recently expanded its footprint in China by inaugurating the Nidec Qingdao Industrial Park in Shandong, consolidating its motor and electronic operations within a single facility.