Aspex Urged Nidec to Keep CEO Kishida Before Sudden Exit

Hedge fund Aspex Management wrote to Nidec’s board on Sept. 28 urging that chief executive Mitsuya Kishida remain in place while the company addressed an accounting crisis and a delisting warning. Kishida resigned unexpectedly days later and was replaced immediately by longtime executive Michio Kaida, a change that coincided with a sharp fall in the company’s share price.

Aspex, which says it holds about 7% of Nidec, asked the board to keep Kishida at the helm provided he remained suitable for the role. The letter called for management continuity to restore financial reporting, address regulatory concerns and update Nidec’s medium-term business plan. In the letter Aspex wrote it would support Kishida staying in the post ‘as long as he continued to meet the required standards for the role.’

Nidec has been preparing to restate some prior results after accounting irregularities were uncovered last year and has received a delisting warning from the Tokyo Stock Exchange. The company described Kishida as having engaged in remarks and actions relating to financial reporting that it considered inappropriate. Nidec did not provide a comment on Aspex’s letter.

The company announced Kishida’s departure shortly after reports of the leadership change. Michio Kaida, Nidec’s chief technology officer and a long-serving executive, was appointed with immediate effect. Reports that Nidec could record a fresh impairment charge of about JPY1 trillion (roughly $6.4 billion), together with the leadership change, pushed the shares down roughly 21% through Tuesday.

Nidec, a major Japanese maker of electric motors, continues to work through restatements and scrutiny from regulators and investors. Kaida’s appointment places a long-time insider in charge as the company completes its financial reporting adjustments and considers any further restructuring.