Hello, everyone. My name is Misaki, the assistant of the third-party committee. I would like to introduce to you our presenters today. Here are our presenters. Mr. Kaku Hirao, the Chairperson of the committee. Mr. Tomoki Inoue, a member of the committee. Mr. Makoto Shirai, another member of the committee. First of all, Mr. Hirao, the Chairperson, will provide you with the result of the investigation, followed by the question and answer session. Mr. Hirao, please start your presentation. Thank you. Can you hear me okay? This is Kaku Hirao, the Chairperson of the third-party committee established by the Nidec Corporation. I'm the alternate law in charge of a foreign law joint enterprise at the Nishimura & Asahi Law Firm. Please take a look at the document, the outline of the investigation report. Please take a look at the document in front of you. This is a summary of our investigations. Based on that investigation, I would like to provide you with some verbal explanations as we go forward. Prior to launching the presentation, I would like to let you know that the investigation by our committee are still ongoing. Investigations so far have revealed various facts. We have analyzed various facts, and we have accumulated facts enough for us to be able to make proposals and recommendations. For a long time we have had these investigations ongoing. We have had root cause analysis. I believe this is the right timing for us to make the announcement of those findings. The purpose of this committee is as follows. This committee was launched to reveal all the facts relevant to the issues involving Nidec Corporation, and to make recommendations for recurrence prevention. This committee is not intended for finding someone responsible for any areas of business-related responsibilities. Please take a look at the document in front of you that I've mentioned. Please take a look at the document over there. Starting from September 3rd, 2015, that's the start of the period of our investigation range, time range. The investigations are ongoing, as I've said already. We have three of these members. These members are all in charge of those investigations based on the guidelines established by the Japan Federation of Bar Associations. Based on those guidelines, we have launched our investigations. We examined all the relevant documents. We launched forensic investigations as well. We interviewed via a questionnaire, various managerial and executive employees. We established a hotline on various issues. We have covered 319 people, including former Nidec employees. 532 times we interviewed various individuals. Forensic investigations include former Nidec employees, 113 people in total. We have covered past fiscal years, 2020 through 2025's first fiscal quarter. When necessary, we expanded, we went further back in time. Now, I would like to provide you with an outline of Nidec Corporation as a company. You may know, may not know all of them. Mr. Nagamori established this company back in 1973. It's a corporation, this company has expanded their businesses very, very rapidly. M&A was one of the driving factors of this company. Back in 1984, the fan motor business was purchased by Nidec. Since then, Nidec has been expanding itself and its businesses through M&A. The small, the precision motors and appliance, commercial, industrial, and motion energy, and various areas are now Nidec's business fields. Nidec started with hard disk drive motor business, which supported its rapid growth. Due to the changes in the market, Nidec has expanded its areas into automotive and appliance and industrial other motor-related areas. Nidec Corporation is not the only entity within the Nidec Group. 354 subsidiaries and affiliated companies exist within the Nidec Group. Business group system have been and were introduced in 2014 or so. We have SPMS, ASIM, MOEN business units, as well as machine learning and automation. These five different business entities are in existence as of today. In addition to these business units, there is another unit of business management called the Group Companies, 15 companies. There is one exception is that one company with the ad offices. All of these companies are managed by Nidec Corporation's Group Company Management Department. I'd like to give you some findings as a result of our investigations. Section one, findings, outline. I'm not going to details as we have 250 pages or so long document. I refrain from printing all of these making copies. We didn't make all of these copies for all of you today. We have a large number of findings, as you can see in the document. The investigation are still ongoing. The numbers of inappropriate accounting practices were found in numbers of Nidec Group business bases. There is a variety of incident that there are, you know, such practices. Low profitability, low profit materials. Intentionally, the material loss was not really recorded despite its low future prospect. There was a case of avoidance of financial impairment. Inappropriate personal expenses were recorded as fixed costs in order to postpone the recording of fixed assets or pick fixed costs, actually. There were some subsidiaries regarding the return of subsidiaries. There are some subsidiaries whose nature were falsified intentionally. Inappropriate recordings of the allowance for bad loans. These cases were just among various the inappropriate practices that we found. I have just picked up 12 of all of these cases. I would like to pick up 12 of these cases to explain them in detail in the document. In 2025 quarter first end, there is ¥ 139.7 billion is the amount of negative impact on the latest covered earnings of Nidec Corporation. There was excessive pressure on people to achieve company provided profit targets under the strong leadership by Mr. Nagamori, who for a long time and also has been in existence that it is a sin to be in a deficit. It was mandatory for each entity to achieve its own target. For a long time, Mr. Nagamori has made established these targets for individual subsidiaries on a top-down way. These the targets were based on a future expected growth. It was above the capability of some of these subsidiaries and other entities. To the CFO of the head office as well as other executives, Mr. Nagamori applied a strong pressure to achieve these targets from himself. When it comes to these pressures, these pressures were applied to these executives, organizations, and subsidiaries. This is just one example. One of the examples we have understood is that if you cannot achieve the target, each and every day, Nidec MCJ executives held meetings each and every day to force or blame these managerial executives for not achieving the target. Such unreasonable instructions were given to these subsidiaries managerial and executive employees. Even after the end of fiscal term, if a certain organization fails to achieve its target, the instructions were given to achieve its target even after the end of a certain quarter. There was sometimes direct pressure applied from Mr. Nagamori directly to those executives. Such a strong pressure was applied from Mr. Nagamori to others. Fixed avoidance of in financial impairment cost was made into assets by these manipulations. In some cases of some organizations, they tried to achieve their targets. When it comes to CFOs and other organizations, executives came up with a way and explained those method to financial the auditing firms for approval. Sometimes, people falsified facts, and sometimes people neglected giving explanation. Of course, asset calculation method as well as other methods, there is some range of accounting processes. Not all of these methods were incorrect, but our investigations found sometimes those processes were beyond the realm of proper processing, and that's the inappropriate accounting practices. In order to achieve the consolidated performance targets of the Nidec Group as a whole, Nidec Group CFO and other executives were under the pressure to achieve the company's target. If they failed to achieve the target, they were reprimanded very severely by Mr. Nagamori. Now I'd like to mention negative legacy. I would like to explain that in detail here. There were some results, efforts made to eliminate it, eliminate such legacies. This was part of the reasons for this committee to have been established. In internal investigations prior to the establishment of this committee, there were quite a few issues in existence. There were some documents about the suspicious activities or conducts by Nidec executives. Sometimes assets were created as a result of stagnation, and those assets were called the negative legacy in Nidec's term. Nidec groups collected information about these negative legacies. The actions were launched to handle those negative assets or negative legacies. On a periodical basis, Mr. Nagamori and other executives would receive the information about those negative elements. In announcement, the announcement made on a structural reform instead of reporting the negative legacies. Self-funding was one of the terms used in Nidec Group. Self-funding was a term to cover the negative performance with something that you can use, and that's so-called self-funding. In a recording loss means that deterioration in your organization's performance. You can only do so much about taking such a method to handle or process such losses. While having those process, new losses will be created in some cases. Under this situation, the internal audit department has completed the project to normalize the assets quality. In replace with that, the structural reform was launched in the first quarter of the FY22. These two initiatives are similar, therefore, I'd like to introduce what it is. In the first quarter of the FY22, under the leadership of the Nidec head office CFO, under the name of the structural reform, the process of the negative assets or negative legacy was started. In order to facilitate the candid reports from facilities and BUs for this initiative, the CFO believed that this should not be incorporated into the performance evaluation of the BUs and the subsidiaries, meaning that the self-funding was not severe enough, this was not regarded as self-funding. In other words, this would be processed outside of the performance evaluation of the BUs and the subsidiaries. That is a scheme for this. This was proposed to Mr. Nagamori, and approval was given. As a result of that, around ¥ 160 billion of the self-report for the negative legacy was made. However, when the CFO got the approval from Mr. Nagamori, throughout the year for FY 2022, the policy not to go below ¥ 100 billion of operating profit was reported to Mr. Nagamori, and approval was given. In addition to that, Mr. Nagamori gave the instruction that a V-shaped recovery should be achieved in FY 2023, and then in total, around ¥ 160 billion of negative assets were reported. At which, the assets that require the process highly and the necessary assets for the V-shaped recovery were prioritized. Other deals or other assets were put on hold to be covered in FY 2023 onward. This is called the planned process at each BU and subsidiary. This planned treatment or assessment should be done at each BU. Or at the subsidiaries that... Now, this is so-called, the self-funding, meaning that they have to achieve the performance forecast while they have to process the loss. This loss must be absorbed by the profit. As a result of that, ¥ 56.6 billion of negative legacy was processed in the fourth quarter of the FY 2022. At the same time, prerequisite is not to go below ¥ 100 billion of operating profit throughout the year. The simple subtraction tells you that the negative legacies reported by BUs and subsidiaries, most of them are outside of the structural reform. Our committee found that when this structural reform was made, although there were made report made, however, the appropriate process was not conducted because of the self-funding. This is the situation for the fourth quarter of the FY 2022. I'd like to explain what happened after that. The negative legacy going through the planned process required the expenses. These expenses were covered by self-funding, and therefore actual implementation was not done. For example, in the fourth quarter of the FY 2023, because of the launch of new businesses, ¥ 59.8 billion was recorded as the expenses for the structural reform. In addition to that, the expenses necessary for the process of the negative legacy was not incorporated into the performance assessment of BUs and subsidiaries, meaning that this is irrelated to the self-funding. President Kishida explained the necessity for this initiative over and over again to Mr. Nagamori. However, Mr. Nagamori insisted that the operating profit target must be achieved, and therefore this request was turned down. Regarding the authority of the approval of Mr. Nagamori, as you found in the official version of the investigation report around page 44, up until August 2025. Nagamori, including the personnel change, as well as the allocation of fixed assets, all of them have to get the approval by Mr. Nagamori. In this sense, former President Seki and now former President Mr. Yoshimoto, although they are called president, but they didn't have the authority as you imagined, because everything must get the approval from Mr. Nagamori. This request was turned down, therefore as a result of that, in the fourth quarter of FY 2024, the negative legacy must have been processed. However, there's no treatment made. That is the situation regarding this situation for the untreated or unprocessed negative legacy. Mr. Kishida has recognized it. That's all for the situation for the negative legacy. Furthermore, what happened furthermore at Nidec, I'd like to explain what kind of fraudulent happened before that. One of the characteristics for the company who got the fraudulent, in many cases, the fragile or the internal audit function was pointed out. This was not applied to Nidec. In the 1990s, Mr. Nagamori found the situations where subsidiaries committed accounting fraud. Therefore he felt the necessity to set up the dedicated functions. That's why Mr. Nagamori reinforced now the personnel by hiring the certified accountants externally, for example. At the same time, he established the department for the internal audit. This is really rare for other companies because Nidec has established the internal audit department dedicated to the audit activities. This internal audit department covered around 60 sites. In addition to that, throughout the whistleblowing system, if the suspicious case was reported, special investigation was implemented. This is so-called the official public initiative. At the same time, Mr. Nagamori has found that there are some employees who are regarded as not having highly capable for the audit of functions, then he asked them to conduct audit activities mainly for the bribes and other accounting fraud. If the suspicious case was reported, special instructions were given by Nagamori, Mr. Nagamori, to conduct the focused investigation. This audit or investigations were conducted anonymously around in 2011 to June 2020. This anonymous audit was conducted. The contents of this anonymous audit was not reported to the internal audit department nor the accounting firm. This employee found any accounting fraud, he or she asked the correction immediately. If the amount is huge, instead of immediate correction, instruction was given to process those the accounting fraud more than one year to prevent the huge loss of the operating profit. This act itself should be regarded as accounting fraud because such a loss should be recognized as loss. Upon the report from the employee, Mr. Nagamori recognized that there are some cases where the immediate actions were not taken. He has accepted those cases such that the secret audit was ongoing. Apart from that, if the whistleblowing was made and then the official investigation was conducted within the Nidec Group, each year more than one accounting fraud was found, and each time the internal audit department has implemented special investigations, and there's no delay of the fiscal statement announcement. All of these accounting fraudulent cases were not published at all. The former executive said in our interview that Mr. Nagamori believed that it's very important to announce the fiscal financial statements faster than any other companies, and it's impossible to be delayed in the schedule for the financial statement announcement. Therefore, they have to prioritize to make it in time as the most important time. At any rate, whenever acting fraud was captured, the internal audit department has taken function. In the second half of the FY 2018, the external law firm has conducted the investigation. This period, the second half of the FY 2018, there was a report by the a party who were in charge of the audit for the United States sites, external audit investigations were made as a result of that. More than 1 accounting frauds were captured. In addition to that, as part of this investigation, forensic investigation was conducted, this forensic investigation has found that the similar accounting frauds were committed at many cases within Nidec Group. Emails and the documents have been shared with PwC Kyoto, it should be reviewed by the internal audit department. This relevant email correspondences and documents are related to the negative legacies related to the asset normalization project. That's why CFO of the head office, as well as the accounting department head, had explained what happened for this project for the asset normalization to PWC Kyoto. If you refer the list of the negative legacy prepared by the internal audit department that was shared with PWC Kyoto, says that the total amount of the negative legacy as of the third quarter of the FY 2018, ¥ 6.3 billion. Quite a number of negative legacies were generated due to the intentional fraudulent actions. This forensic investigation found that the anonymous audit was conducted for a subsidiary, and this report was also shared with PWC Kyoto. As a result of this forensic investigation, emails and other documents were confirmed, and based on them, seven cases were illegal accounting process. The total amount was estimated as ¥ 1.66 billion. However, by the end of FY 18, corrective actions were taken, and therefore, the all the necessary actions were taken. As a result of that, the announcement of the fiscal financial statements were done on time. PwC Kyoto submitted that there's a report of the appropriateness of their financial statements. As I have mentioned, legacy, negative legacies include the cases where the intentional wrongdoings or the fraudulent acts were not denied. If you see the mark of the intentional in the draft of this list, we have not yet confirmed whether the actual intentional fraudulent act was committed or not. There's no confirmation on that. There was no explanation for the PWC Kyoto for the actual situation of that. This external, audit firm As a result of this audit, firm, although the auditor opinion of the appropriateness was submitted, however, a series of accounting flaws were identified every time the investigation by the internal audit department was conducted. There was a strong excessive pressure from the Nidec's head office. Mr. Nagamori's this style, but people refrain from trying to change the way Mr. Nagamori tries to force people to achieve the company's target. I'd like to give you an example here. This is about Nidec Servo Corporation. Please take a look at the page two or three or so. Please, if you have an electronic version of the document, please take a look at the page. Internal audit has confirmed various facts. Nidec Servo executives committed internal misconduct because of the excessive pressure to achieve sales targets. Despite all that, internal audit excluded such information about the department from the meeting minutes, and there was no reference made about the incident in any document. Mr. Nagamori had a favorite person and people thought that if this issue was written in the document, that would upset Mr. Nagamori, according to the from Nidec Servo executive. Well, when it comes to Nidec head office's managers provided the pressure, the information, relevant information was shared with the PwC Kyoto. NCJ, which means the Nidec's head office. NCJ has applied various excessive pressure. That is the root cause, allegedly. The comment about the such reference to the excessive pressure was made. We have a hearing minute meetings was found as well. From such executives, there was a strong pressure. Such a reference was excluded from minutes or documents. In meeting minutes, according to this Nidec Servo employees, they knew that it was necessary to achieve the target, but they had no choice but to process those negative legacies within a limited time range. There was a strong excessive pressure from Nidec's head office. There was a comment requesting additional, you know, the interviews with the NCJ executives. There were some comments, corrections were made to some comments as necessary in internal emails. NCJ's involvement was very aggressive, and some corrections are made in the documents to make the situation look normal. Such comments were eventually accepted by parties concerned. We reviewed all the accounting books. We didn't do it, actually. We didn't get to check accounting books. We didn't have hearing sessions with the this auditing firm personnel. We are referring to describe some objective opinions here in the document. From PwC Japan, we received a reply in paper. PwC Japan said in the document, based on the inquiry request received, as you can see here on the page here, we received. I'm going to read that reply out. With respect to the investigation, that First Senior Vice President as well as other executives, and we had a. NSRV, Nidec Servo is our acronym there. In order to achieve the targets and such, explanations from the teleconference was there, but there are some incoherent facts included in the meeting minutes. Hearing minutes were corrected to check the facts. When it comes to this partner, in prior to fact-checking, inappropriate as well excessive pressure were needed to be confirmed to be non-existent. Such a reply was made to us. With respect to this series of these accounting misconducts, there was found some cases, such cases were found in every single fiscal year. I'd like to explain how these facts were explained. These facts were reported to the Auditor Supervisory Board. There was no report made about excessive pressure from Nidec's head office to various group entities. There was a strong pressure from the Nidec's head office, but these board members, audit members didn't realize that these problems occurred because of the existence of excessive pressure from the Nidec's head office. In various areas, we have found these accounting misconducts. It is because of the excessively high sales standards set by Nidec's head office. That was our notion initially. Targets were set very high by this is with Mr. Nagamori's management method itself. It's very difficult to fight such a method head-on. Such information was never shared with outside members of the board of directors. Next, please go to the next section of the document out there. We never found any facts about the instructions, leadership taken by Mr. Nagamori about this excessive pressure. Mr. Nagamori knew that there are some corrections are made to accounting information that itself would be could be accounting misconduct. It's inevitable that Mr. Nagamori at least tried to accept the manipulated accounting information. There was a strong pressure, once again, for all the employees to achieve sales target, and those pressures were coming from Mr. Nagamori himself. It's very unusual for a department to be established to be in charge of handling or processing accounting information. Mr. Nagamori still continued to request everyone to achieve excessively high sales target. Mr. Kishida and others requested to Mr. Nagamori to go to a structural reform several times to go, you know, not to use the this negative legacy related method, but Mr. Nagamori rejected such a idea for reform. Therefore, Mr. Nagamori himself would be the very individual to be blamed for, to be responsible for all of these misconducts. There was no evidence found of Mr. Kishida's involvement. Mr. Kishida made efforts to improve the situation in our opinion. The final decision, approve authority was in Mr. Nagamori's hands. Due to the lack of the launch of the reform efforts, Mr. Kishida and the rest of his companies are in the current situation. Mr. Kishida himself should have being proactive in handling those negative legacy related issues, even in violation of Mr. Nagamori's instruction. Mr. Kishida should have acted more strongly, in our committee's opinion. Mr. Kobe, who was once such a person, he has long been in charge of sales operations of the company. Mr. Kobe wasn't found to be responsible for giving instructions for forcing people to achieve excessively high sales targets. There was no evidence we were able to find. Still, Mr. Kobe, even though less frequently than Mr. Nagamori, would receive reports from people in behaving committing misconducts. Mr. Kobe was aware of such misconducts in our committee's opinion. Kobe was regarded as the Mr. Yoshimoto and Mr. Seki were both regarded as successors to Mr. Nagamori. There was no evidence found these two individuals to have been aware of such misconducts. Once again, the outside members of board of directors, as well as members of audit and supervisory board, internal audit department made reports to them, but those reports never touched the root causes of misconduct. They were doing all that because of extremely pressure for a better business performance. That's a reason for this misconduct, and nobody was aware of that. Outside directors, none of them, based on our committee hearing interviews. For these companies had to reflect owner Mr. Nagamori's management principles and aspired always to perform high year, and achievement of that target was essential. That pressure was not recognized as anything extraordinary, and negative legacy issues were never shared with outside directors. Out of those that we interviewed amongst outside directors. They were not aware of Nidec having a long time issues of negative legacies and those efforts to resolve that issues were carried out for quite some time under the name of structural reform or making the asset a more healthier project. Those were not recognized either. To get to the root cause analysis, I believe that for our committee, we wanted to focus on the root causes, narrow down to the fundamental causes. The first issue is massive pressure for a better business performance. That is a core reason for this fraud and accounting practice. First of all, unrealistic target was established. To achieve that target, they faced enormous pressures. That pressure started from Mr. Nagamori, and that is passed on via Nidec's management executives and to all the business units and subsidiaries executives. That, in the end, resulted in fraud and accounting practice. Nidec had this very unique internal audit entities with accounting audit dedicated division. In that sense, compared to other companies, there are fewer opportunities to commit to account practice. The amount of pressure is way more than those possible fraudulent pre-prevention functionality that accounting dedicated internal auditing team they fulfill. What's in the context is Mr. Nagamori's absolute power within Nidec and all the authority decision-makings were in fact conscripted to Mr. Nagamori. Mr. Nagamori is first of all has the ultimate authority over personal matters for our group's executives. That is causing the accounting fraud, the enormous pressure to meet all the monthly target. This negative legacy that they have are facing for a long time, and there's been some efforts to reduce that sometimes, they were not drastic enough. All that is because of this enormous pressure from Mr. Nagamori to achieve the business performance target. In the background of that, Nagamori had sole-handedly had a power over appointments and nomination for executives, personal matters. Regarding the divisions that were not functioning. First, accounting division. We have discovered that frauds were conduct involves accounting departments of a business division and sub-subsidiaries. Accounting irregularities involving accounting departments at Nidec's headquarters are also discovered as well. The reason why accounting department to act as they're supposed to act as a second line of defense, but and supposed to act to check and validate the accounting practice of the company, but that was not functioning. We have consulted at least with external legal firms and as a preventative measure with external legal firm, they were asked to install a special report line at the business unit and subsidiaries accounting. That never realized. Actually that's mentioned in the report as well. They were quite weak in cross-divisional functionalities. One of the typical example is to try to grasp the negative legacy, but they were not, despite the fact that they are within a same group. Regarding internal audit divisions, the reason why the fraud accounting practice repeatedly happened, internal audit department recognized that the origin, the core reason resides in Mr. Nagamori, but and also together with that, business performance pressure. They didn't dive right in to the core issues. Internal audits, research reviews, could not possibly delays all the business settlement, fixed year closing schedules. That was most importance. Internal audit departments, auditing committee, auditing board members and regular auditors, and committee members were aware that core reason for accounting fraud practice were because of the enormous pressure from Mr. Nagamori. Regular audit members were saying directly that because of this high aspirational target and to do the best to achieve it. That is Nagamori's management style itself. It was quite difficult to question that straight on. There was no governance working at all. External auditor, there's been some individual cases explanation in the past, but those explanation were remaining in the surface level. There was no core reason for this accounting fraud shared with external directors. Outside auditors were not aware of the fundamental reasons or core reason that Nidec's was facing. This issue, this problem awareness were not aligned amongst the group and the Nidec group at various different sites are constantly, repeatedly having a wrong accounting practice is quite abnormal. There has been no outside director who saw some oddities in that situation. The committee concretely agrees that anyone with a professional knowledge, a different knowledge or experience looking at such a unique situation, they might handle it differently. When our third-party investigation committee faced these issues, this amount of significant account wrongdoings were already discovered within the group, we were surprised with that. It wasn't the first time they discovered it. Nidec's executives and employee provided inaccurate and misleading information to accounting firms to elicit a favorable opinions. Nidec's directors were seeing personnel of PwC Kyoto as a easy one's target to persuade or to give in to. What's recently discovered is some of them were on extension of aggressive accounting practice. Because they saw PwC personnel's counterparts as a easy target to persuade, that also led to this nonstop practice of accounting fraud. That's also a possibility. Amongst this accounting fraud, we saw the Nidec employees hiding some of the evidences or testified in the false manner to PwC Kyoto. Even if the auditing entities were not fully aware of those evidences, the ones who were, they shouldn't be blamed for the wrong accounting practice. The ones who are actually doing it is not the auditing entity, it's Nidec itself. Nidec lacked in understanding that they are fully responsible in providing the correct and accurate financial statements. Nidec's reform, reconstruction committee head, is led by the current CEO and the president. Nidec's improvement measures, from our committee's perspective, do have certain concerning point, but fundamentally, we believe that those measures are beneficial to prevent accounting fraud from happening again. Our assessment is that their improvement measures were valid. On this occasion, we would like to provide additional advice from this committee. First is complete ejection of Mr. Nagamori presidency. He needs to be leaving the company completely because this was a company that he founded. His management principle was permeated throughout the company. This whole series of accounting practice cases root causes is because of Mr. Nagamori's management styles and his governance are not working. In order for Nidec to reform itself, Nidec needs to exit Mr. Nagamori's presence. In order to reduce the impact from Mr. Nagamori, other shareholders, I do believe there is a discussion, that's worth doing, for the possible termination or the rejection, ejection or cancellation of the shares or under some consensus, to limit the certain rights exercise. It's not something that Nidec's can do through its own initiatives, but it can be a part of a preventive measure. Many of these measures that the company put out are on the surface level. What's important for Nidec is not only Mr. Nagamori, but only the part of Mr. Nagamori's surroundings making significant impact for the appropriate business practice. How to prevent that, the key player will be outside directors, of course. What's the problem here is a business manager may be influenced by only a certain limited number of stakeholders. Strategy to sort appropriate succession business operation. The most powerful countermeasure is via not the supervision functionality under the direction of management, the one with legally backed up authority. That means external directors. It's easy to be said, the external directors participate in the board meeting only once a month. It's quite difficult to understand the root cause that is hidden behind businesses. Even if they recognize certain agendas that are challenges the company bears, and they make a comment at the board meeting levels, but it's quite difficult to combat the counterargument from the director who are in executive positions, who are involved in day-to-day business. Given all that advice, even if we were to include accounting professional or someone with a significant management experience in external advice, will not completely guarantee that any tinted, colored looking glass when making a completely independent audit responsibilities. In order to fulfill the functionality of Outside Director as the way it should be, we believe that we need to improve the information that is shared to Outside Director. That's essential. Also, we need to have a system where Outside Director can work with other external parties to strengthen his or her advice. First of all, the information quality is essential. That's been our biggest issue here. Outside Directors are legally backed to save the company in the times of emergency. It is essential for outside director to provide advice to save and rescue the businesses through the Nidec management in the time of needs, and regarding necessary support. Having a dedicated staff may be too excessive, but whenever external director requires some support, companies need to provide that as well. As needed, for the outside directors, strengthening, it's probably beneficial for these companies to have attorneys, or to get advice, seek out from legal professionals. Outside director has strong authorities, but the reality may be different because there may be a certain reservation, certain consideration, paid to the regular directors. Outside directors also are human too. It's unavoidable, and that's mentioned in the improvement measures taken by Nidec. Getting a teams involved is essential to improve this company. One person will not be able to save this company. If there were three peoples with aligned issues awareness, then they can cope with those issues, and then we will be able to combat those difficult challenges. I think that is quite important. In the end, sincerity to the investors, to the open capital market is essential and that needs to be done thoroughly, as I mentioned in the root cause explanation sections. Disclosing inaccurate financial statement that are approved or disapproved by auditors is a fraud, and it's a fraud against the capital market. They need to recognize that Nidec is losing the trust of investors now. In order-- That is the first step to Nidec to restore the trust is to show the true and honest business situation openly to the capital market. That is essential work that needs to be carried out by CEO and CFO. Last but not least, I don't think this accounting fraud practice gives questions to Nidec's capability as a manufacturing manufacturer. The issue is because they were so focused on meeting the targets, and that pressure causes accounting practice. Nidec's core business value of monozukuri company still remains. The company is not what Nagamori San imagined to be. If Nidec can prove to the market that the real capability as a manufacturer, I think the market can trust the Nidec's again. I have to emphasize that the current investigation is still ongoing. For my officers and the current officers, I really appreciate your support and assistance, especially for the current officers at Nidec. Please not they make new born Nidec, and that attitude has been felt quite strongly throughout our investigation. Therefore, on behalf of the committee, I'd like to appreciate your support. Because you are member of Nidec and therefore as a human as well as the manufacturing enterprise, you are the base and true strengths of Nidec. I believe Nidec can regain the trust from the market and investigators, the investors because of you. Sorry for occupying the stage for a long time, but that's all for the result of the committee investigation. Thank you very much for your kind attention. Thank you very much. Now, I'd like to open the floor for the Q&A session. Today, we'd like to receive as many questions as possible from the audience, can you please limit yourself to raise one question per person. If you have a question, please raise your hand and the moderator will assign who can speak up. Please wait till a microphone alerts you and please identify your name and affiliation before stating your questions. Now, please raise your hand if you have any questions. Okay, the person in the third row, please. I'm Amori from Toyo Keizai. I have just one question. Now, this time investigation and its result, it's concluded that responsibility should be filled out or by no means there is no such that the gravest case is identified in this investigation. Oh, sorry, it's not chronological, but criminal. That's right. Okay. As I mentioned at the very beginning, the role of our committee is to analyze the root causes for the fraudulent a-accounts. At the same time, we expected to present the recommendations. Of course, there's the criminal penalties are put in place based on that prerequisites, whether we have to ask criminal responsibility or not. That is outside of the scope of our role of a committee, and this was not what I have to do as the attorney at law. Because it's related to the ethical issue for the attorney, they please understand that. It's very difficult to respond to that question as an attorney or lawyer. Okay, thank you very much. The next question, the person in the jacket at the front row, please. Thank you very much. I'm Murai from Diamond Corporation. This time, accounting fraudulent, when I read the report, at each company there are wide varieties of the fraudulent activities such as the avoidance of the impairment processes or the deferral of the profits, and these activities were identified throughout the group companies. Because of the very strong aggressive and pressure imposed by Mr. Nagamori, this is one of the reasons. In addition to that, regarding the fraudulent accounting process, there are no cases where the instructions or orders given by Mr. Nagamori. However, regarding the disposition of the legacy liabilities or involvement of the CFO to legacy liabilities or the organization of a special audit department processed and disposed of legal legacy liabilities in a very planned manner. When I look at these activities, is that regarded as the systemic and the disposition of the accounting activities are conducted? There's no instruction nor order from Mr. Nagamori for these fraudulent cases. I read it in the report. However, special audit included disposition of legacy liabilities. Each time there is actual conduct of the fraudulent accounting, and therefore to what degree Mr. Nagamori was aware of these conducts or activities, and then based on those recognition, what kind of instructions given by Mr. Nagamori? For example, did he say that he didn't know anything? Thank you very much for very good question because to begin with, I should have explained it in my presentation by spending enough time. That's why I really appreciate your question. First of all, regarding the legacy liabilities, let me elaborate on what it is. These legacy liabilities are not caused by the fraudulent accounting necessarily. Of course, not the future impairment process is necessary or the possibility of the impairment loss should be reviewed and the legacy liabilities are most of such nature. However, some of them, some of the legacy liabilities must be disposed right now here, or some legacy liabilities must have been disposed in the past. However, some of them still remain, and therefore, when you hear legacy liabilities, you believe everything is negative. However, it's kind of risky assets. However, because they are risky existing as asset for each fiscal year, that is a problem because disposition is necessary. Although some of the employees believe that they wanted to dispose of the legacy liabilities, however, if they did so, they could not achieve the expected performance, and they had to defer the disposition of the legacy liabilities. Because of that, they have lost in a good timing. Recognition of legacy liabilities as a whole, and they should be disposed in a planned manner. However, they are not equal to the recognition of the fraudulent accounting. In this sense, the CFO at the Nidec head office, He had used all the planned and disposal. However, it's not good because not ¥ 100 billion should not exist as legacy liabilities. He has to look into the details to identify which one should be disposed and which one can be remained. The order is important for these activities and therefore for CFO. For example, although the SCFO recognized some of them as the bad liabilities and that they though they should be disposed, Did he that much? No. That level of recognition was not done by the CFO. What is your question? Sorry. Then to what degree Mr. Nagamori was aware of this. Regarding this special audit, nature is different from usual audit. To be more precise, please refer the Nippon Densan Copal description in the official report. Let me see the page number. Sorry, I don't remember it, but you can see the detailed explanation for that. If you happen to have the report, I believe it's around page one or two, approximately speaking, where you can see the descriptions related to Nippon Densan Copal. Suppose that there's a certain fixed asset, and it's inevitable to apply impairment accounting. However, in the process of impairment, in a process, Mr. Nagamori himself negotiated with the counterpart. It's failed, and that's why the inevitable impairment process was applied. You see the detailed process, who were involved in the special audit and report, how report was raised to Mr. Nagamori. Mr. Nagamori was aware of this. Although this is just one of the examples, but then regarding the special audit to its activity, we believe that the Mr. Nagamori was aware of the detailed information and therefore based on that, we regarded that Mr. Nagamori accepted the fraudulent accounting. That means that Mr. Nagamori himself was aware of and accepted the fraudulent accounting. Please refer the description of the report. To begin with, I should have instructed that these assets should be disposed immediately. However, the employee in charge of the special audit said that the special disposal was made, and therefore he accepted it. By the way, Mr. Nagamori accepted this time interview? Yes. He was interviewed. I don't remember how many times we got interviews, but I remember at least four or five interviews were made with Mr. Nagamori. Thank you very much. Any other questions? If I may, I have a follow-up question regarding the detailed in a report. Pages of 108 and 109, you can see the exact descriptions referred in this Q&A. Thank you very much. Now, the next goes to the person in the second row from the back. Emi Sato from Morgan Stanley. First of all, thank you very much for your explanation. At this moment of time, investigation is still ongoing, as I heard. At the end of the day, the report from the investigation will be available. When can we see the report? At that time, can we see the amount of impact onto the assets, net assets, compared to the previous fiscal year? There's a negative impact of ¥ 139.7 billion, according to the current report. Are there any possibilities that this amount may change? In addition to that, because investigation is ongoing, the reason why the investigation is going on, what's the missing points? Thank you very much for your question. Let me answer to the questions where I would be the best person to reply. Final report of the investigation, I assume you'd like to know when the final report will be coming out. All I can say is TBD. Nothing is determined yet regarding the timing of when the final report will come out. The third question, probably I should answer to the third question, but can you please state your third question once again? I don't know when, but now the ¥ 139.7 billion, this is the impact onto the assets, net assets, and additionally, what your committee has to investigate. Thank you very much for repeating your questions once again. Regarding the question two, we have completed the root cause analysis. What remains, that is the each case of fraudulent accounting investigation. We have to complete this investigation. That's why in this report, there are 12 specific cases. This is just a part of the fraudulent accounting, in addition to them, there may be other fraudulent accounting. Our committee is still conducting investigation. What internal audit has done, what audit and supervisory committee has done and what is the special audit was, these are the related to the root cause analysis, we believe that our committee has exhausted the root cause analysis of such. The second question or the first point in the original questions, probably I need to ask Mr. Inoue to respond to that. Thank you very much. This amount of ¥139.7 billion may change or not. Our investigation is still ongoing, just one week or another would be suffice to complete our investigation. I myself cannot say it clearly. We have to wait 'til investigation completion. There may be the further negative impact onto the net assets. How much will it be? I cannot say it right now. Please understand the following regarding the seventh impact onto the consolidated financial statements. Probably, usually, you'd like to see the impact for each fiscal year. What we got this time is now FY 2025, the end of June, as of the end of June 2025. That is a timing of calculating the impact onto the net assets in order to disclose and publish this report. We have completed the root cause analysis. We have confirmed almost all facts. Now, the committee believe that it's better to share some numbers, although it's still working in process. However, we believe it's better for us to share some numbers, and therefore, it's not a number for each year that we'd like to share the latest number. That is ¥ 139.7 billion as of June of 2025. That's why from now on, we'd like to finalize the number for each year. There are some deferrable. However, as a result of the investigation, we may see some deferred numbers. However, we have to wait till the investigation completes. Once we complete the investigation, we'd like to share the number. Most important point is that now, what is the amount of the fraudulent accounting for each year? We have to clarify the number for each year. That's why we needed to investigate the matters more. How many years do you go back in time when you do investigate? It's from 2020 fiscal year till 2024 fiscal year. Plus our first quarter of 2025 fiscal year. Five years and three months, actually. The investigation has spanned over six months, and your numbers are yet to be finalized. Does that mean that Nidec does not have enough information or documents? Or what... Would it be because of a lack of appropriate personnel at accounting or financial departments? Let me answer the question once again. There are quite a few factors involved in here. If I may give you some information. As you can see in the investigation report, we conducted digital forensics, questionnaire, interviews, hotlines. We used all of these methods to understand what issues were. There are quite a few issues we found. It's a huge number of issues we found, actually. We at the committee checked all of these issues one by one, and some issues were truly terrible. We had to cover all over the world. Issues all over the world. It was difficult for us to be able to handle all of these alone. We recommended the voluntary accounting inspection. That's the approach we took. We cover all the CFOs, accounting GMs, to go back over the past six fiscal years, starting from 2019 of... They have to cover all of the six fiscal years to check for any problems or misconducts that they were able to find. In order to help them, we found various method schemes for misconducts in inventory assets. For example, they're overestimating the quantity or the amounts. All of these, the schemes have to be covered, we need to come up with a checklist to cover all the related affiliates as well as subsidiaries around the world. No one would trust you if you could do it, everything yourself. You need to come up with evidence. We had these people provide us with evidence from the past. That way helped us to understand various relevant matters. We had the cross-checking method introduced as well. Our company's CFO or accounting GM were checked by equally experienced accounting personnel from another organization. We did this cross-checking at all these different business bases all over the world. This process is almost over, and we have edited more than 1,000 issues. Cross-checking is still ongoing. There are some 10% to 15% of the entire business bases that are yet to be finished with this approach. Nidec head office is supporting, well, we're getting support from outside experts, and these experts need to check evidence as well. There's a triple checking method we have employed. We, the third-party committee, examined the results of all of this checking. It was huge amount of volume we had to cover, and schemes were various. It had to go through various people's eyes to understand the truth. This is why it took as long as six months or even longer. Thank you very much for explanation. Thank you. I would like to cover questions from as many people as possible. One question per person, please. The person over there, wearing a pink shirt. This is Chikao of Nikkei Cross Tech. I would like to ask a question regarding Mr. Nagamori. Power harassing management, it was very infamous from the past, around a long time ago. That person was very strict about achieving a target from the very beginning and the foundation of Nidec. Since approximately when this misconduct started taking place? Mr. Nagamori's strictness was shifted into a misconduct-related approach. What would you say would be the timing? Thank you very much for your question. To give you a conclusion first. We couldn't find out exactly when this misconduct started. Still, at least we can say that, 2020s or even 2012 or even 2013, even around that time, ¥10 billion orstarted. so of negative legacies existed. The facts were checked or confirmed 'cause I believe that's when as the accounting misconducts were being conducted back then. Mr. Nagamori himself in a hearing session with us, told us as follows. Mr. Nagamori himself liked his so-called hands-on approach, according to Mr. Nagamori himself. His approach, according to himself, was not really perfect enough. In the recent years that we have checked, I believe his hands-on approach was insufficient. The business targets were decided based on shareholders' perspective. Because of that, these targets were unrealistic. It was unavoidable for such unreasonable targets to be created, and that is what I could say to your question. When the sales exceeded ¥ 1 trillion, for example, when the company launched the E-Axle business in 2020 fiscal year or so, he started explaining in a very large blueprint, in my impression. How would you say to those situation events? With respect to financial impairment, there was a huge impairment. That's a fact that happened. When it comes to accounting misconduct, I believe that occurred far before such event took place. This is something that I've mentioned in our investigation report. Mr. Nagamori himself were talking about achieving the sales target. It was ¥3 trillion or even more. Mr. Nagamori was around the 40th anniversary of the company. I believe he probably started saying something his company could not achieve. Is that Mr. Nagamori's own words? That is correct. In our interview with him, he said that. He knew he was reaching the target. He didn't say the exact words, but he was feeling that way. It's not exactly related to the accounting misconduct themselves. It wasn't that there was a certain trigger for all the accounting misconducts. There was excessie pressure for people to achieve very excessively high targets. Under the such circumstances, a misconducts occurred. Thank you. Please. This is Shirai, member of the committee. I would like to add some points to Mr. Hirao's point. During the company's 40th anniversary. Page 40 is where this fact is mentioned. Around 2023, Nidec was 40 years old. He started thinking that he was saying something that is rather unreachable as a company. Thank you. Any other questions? Okay. On that line, the person fourth right from the top. This is Kanai with Yomiuri newspaper. Thank you very much for your explanation. In your explanation, you said Mr. Nagamori, Kishida-san, Mr. Kobe. Mr. Kobe, Mr. Nagamori, Mr. Kishida weren't really leading these negative efforts, but CFO related organizations were in charge of those problematic issues. Some people thought about these manipulating methods. What layer of people came up with such methods? Were these people able to come up with such methods after being told of such methods by other people? We have identified various schemes at different timings. If you take a look at the document, we have 12 different cases. These people are very various. These people vary. A CFO of a subsidiary, and after giving approval from the subsidiary's president, he came up with the scheme for misconducts in one case. In another case, a head office's accounting personnel led such efforts. As a background, people were forced to achieve the targets. The subsidiaries were so forced to achieve their own targets. CFOs of head office, they need to achieve their consolidated targets of the company. Head office's accounting personnel try to help subsidiaries achieve their targets based on a conversation between the head office and its subsidiaries. There are quite a few variations. It's all a part of the same background. You have a CFO of the head office, you have the executives of subsidiary, related group companies, and other personnel concerned were involved in this misconduct in many cases, in my opinion. Any other questions from anyone? Okay. The person wearing a cap or hat, the fifth line from the top. This is Miyajima of Monthly FACTA magazine. Thank you very much for your efforts. Thank you. The question that I ask you the most is about the internal investigation. Mr. Nagamori was never interviewed internally. Here, you have, I would say, interviewed five to six times with him. How frequently did he accept an interview request from him? He himself says that he himself was to blame, but what type of statement did he make to your committee? Did he really apologize truly from the bottom of his heart? Did he give any instructions? He says there's no instruction made from him, but he says forensics, et cetera. There is no live voice or opinions from him. It's like the groups of wolves as well as sheep. you know, each group says various things, shouted various things, a royal way of business managements, et cetera. Is it true that there was no instructions? My people knew that what results were going to be created as a result of such instructions. Who is going to be responsible, I wonder. In that regard, I can see, only see the two different of groups, sheeps, sheep and wolves. It's not about the forensics. We like to know all the words of the true words spoken by Mr. Nagamori. I believe shareholders agreed with me. Our media are, we, the media, are to blame, of course. You are the third-party committee. I'm not sure about your contractual terms with the company, but you need to clarify the truth about Mr. Nagamori. Otherwise, this third-party committee will be meaningless in my true opinion. What do you think? Thank you very much for your honest opinion in advance. Thank you very much for your question. You definitely have a point. I appreciate your candid opinion on this topic. I personally think that those words from Mr. Nagamori, raw voices from Mr. Nagamori, I think it's worth sharing. How much interviews have we conducted? We can't share exactly what date, but frequency-wise, I think I'm correct. I met with him. We met with him four to five times, and we spend two to three hours each time. I am not in position to disclose all the exact words and comments shared by Mr. Nagamori. Everything that we need to disclose are within the report. That's everything, nothing more. Regarding your point about sheep versus wolf, I think you have a point. Mr. Nagamori talking about that, traditional accounting, traditional management, mainstream, that is true. He really wanted to have the proper management of that committee, I am not, and nobody in this committee members are in a position to deny that. It is true that he was in part acknowledging accounting fraud, and that originated from enormous pressure, unrealistic business target put up by Nagamori-san. I'm sure, including President Miyajima and the media, has expressed their thoughts, and I do understand your sentiment from that question, too. I do recognize there are various views against the report that we have compiled as well. Thank you very much. We have a limited time for this session because there will be additional press conference by the company. I would like to take two more questions, please. Sei from Asahi Newspapers. I just would like to ask a question regarding to confirm. You acknowledge the accounting fraud from 2012 time, 2013 times. Is my understanding correct? I don't want to misread anything. In our survey process, there was some story about 2013. If I say starting from 2013, that would be misleading. You can say that from the past, from 2013, that is just simple wrong. That it was one episode from one of the subsidiary, I'm sure what they were shared was true, that's why I picked up in my report. That doesn't mean that accounting misconduct happened from 2012, 2013. Your research scope is, investigation scope is 2020 onwards, you believe that this kind of improper practice happened for quite some time, correct? Our survey period started from fiscal year 2020. Thank you. Okay. You don't need to share the detailed numbers, exact numbers, but, number of misconduct, how many cases were you aware of as the third-party committee? Are you talking about dozens or hundreds or possibly thousands? That level's fine, ballpark. Regarding number of cases of misconduct, it's quite difficult even for us to grasp. The reason for that is because we've been asking self-check by all the stakeholders. What happens is that once the report's filed, there needs to be certain corrections regarding, for example, in journaling process, in that entries like ABC, on the debt size may need to be recorded separately. Because of things like this, we are unable to calculate the number of cases at this time. Furthermore, I don't think we'll be able to get an accurate picture of it either. Regarding your questions, I'm sure the number of misconduct is over 1,000. Regarding the misrepresentation of the business performance, false statements about business performance, did it happen? What do you mean? I would like to have an exact definition of false reporting of business performance. For example, in official performance figures that are written in, let's say, securities report, Yūho Report. Those supposed to be official. I think if there was a false representation, they got to be facing administrative or criminal penalties, I believe. You're talking about the false statements in the U-Report security reports. That did happen. That's a fact. There can be some penalties. I am not sure about what kind of disciplinary action that they will be facing. Okay, understand. I'd like to take the next one as the last one. Person who is sitting way back in the room. Venue, please. Thank you for taking my questions. I am from Nikkan Jidosha Shimbun. Nagamori-san was considered to be the expert in M&A acquisitions. He has acquired various businesses inside Japan and outside. In that process, PMI activities, integrating all the operations, including governance and also treasury, financial accounting work too. That balance perhaps was not well done. Do you think that the failures in the PMI effort is a part of the reason for this incident? Did you hear anything about that from Nagamori-san himself? If you could please share episode, that'd be great. In that sense, we're not looking at this malpractice from the perspective of PMIs from accounting fraud. Because our perspective was conducting accounting fraud. I don't think we'll be able to answer your question 100% because the purpose of the report is different. Survey is different. This is a part of our report too. It's already publicized. What he was adamant regarding subsidiary is to manage it the way he bought it. He's quite persistent in not doing scrap and rebuild of the businesses that they acquire-- what he acquired. That is the reason why Nidec has over 350 subsidiaries. Of course, they are doing sub-consolidation too. In the reporting entity units, the number would be less. The accounting practice is quite complex, and the business headquarter and subsidiaries are not connected apple to apple, so to speak. One subsidiaries are doing multiple different business units work. Those cases definitely exist. It leads to complexity in their accounting practice. That is not the core reason for this accounting fraud. I'm sorry, we are focusing quite a bit on accounting department. Regarding accounting department, doing work across the division, that is 1 improvement that is the 1 organization work that they can do. Sorry, I'm not directly answering to your question about the impact of PMI. Thank you. I'm sorry. You asked me about the number of cases, and I answered a little bit. I don't want to mislead anybody regarding the number of misfraud cases. If you could please refer to our full report, page 163, please. Sorry, not 163. Please go to page 155, Chapter seven, regarding the impact of consolidated financial statement. This times ¥ 139.7 billion, and this is mispractice and also mistakes that are discovered in this self-check process. There is simple error in accounting. Error is not misconduct. It's not fraud. We don't want to add fraud with errors. I don't want to mislead you with a number of cases. I definitely like to have all the journalists refrain from referring to the number of fraud cases in your report. That's what I ask as an accountant as well. How would you see this situation? Rather, I would like you to notice that this kind of mispractice fraud were happening at various different sites over multiple different system and fashions. From that, you can make your own assessment. It's not of one particular business unit or one particular country or the site. There's a segment information in page 163 too. There's a misconduct in the small motors, there's misconduct in group companies. 6, all 6 places, that practice were discovered. It's not a number of cases, it's a significant diversity. Okay, this concludes the third-party committee's press conference. Thank you very much. Now we would like to start the press conference. First, we would like to introduce to you our presenters, Mr. Mitsuya Kishida, the President and CEO of Nidec Corporation. Mr. Kazuho Nakagawa, the Vice President and Acting CFO of the company. Mr. Masayuki Iminagi, the Vice President and Chief Compliance Officer. I am Keita Watanabe of Nidec Corporation's Corporate Communication Department. In this presentation, first Mr. Kishida will give his opening remarks, followed by his presentation on the investigation report and our company's response. We like to have the question and answer session after that. Mr. Kishida, please start your opening remarks. Thank you. I am Mitsuya Kishida, the company's President and CEO. It was September the third of last year that we launched a third-party committee on a series of issues. For the following six-plus month period, the committee conducted objective and comprehensive investigations to identify those issues, root causes, make proposals for recurrence prevention purposes, et cetera. On February the 27th, which was last week, Nidec Corporation received the committee's initial investigation report. We are truly grateful to the members of the committees. As they explained the report in detail already, I will explain how Nidec will regard this report. The investigation revealed numbers of inappropriate accounting practices at many of the Nidec Group's business bases. The identified inappropriate accounting practices and errors will make a financial impact on our net assets by approximately ¥ 137.9 billion on Nidec's consolidated financial statement as of the end of fiscal 2025's first quarter. The aforementioned findings include inappropriate accounting practices were conducted based on unrealistic business targets and under excessive pressure to achieve them. The company's management could not correct the circumstances. Accounting and internal audit departments could not perform their check-and-balance functions. Further, employees submitted the wrong information and disclosed inaccurate financial statements to the auditing firm, acting insincerely to the shareholders and investors in the market. We take extremely seriously the fact that we caused such serious accounting misconduct. To all people concerned, we deeply apologize about the fact that we disclosed inaccurate information and failed to meet expectations of shareholders, investors, and people of the market. The inappropriate accounting practices have been causing anxiety and trouble among our business partners, and that we have caused anxiety and trouble to society. To all of the people concerned, we deeply apologize. From the bottom of our hearts, we are truly sorry. Please allow the presenters to sit on their chairs. Mr. Kishida explains how Nidec will consider investigation report and the company's actions going forward. I would like to explain our response to the investigation report. Please take a look at this document. It was back in September 27, we received the actual report, and we did some masking and other adjustments. The investigation by the committee is still ongoing. We will continue to be fully cooperative and fully committed to cooperating with members of the committee. As soon as we receive the final version of the document, we will disclose its contents. The investigation is still ongoing. At many of our business bases, inappropriate accounting practices have been identified. An avoidance of recognizing valuation losses, avoidance of impairment losses based on the sales plans and low profitability of achievement. The impact on the consolidated net sales as of the end of first quarter of fiscal year 2025, resulting from the correction of misconduct and errors identified to date is approximately negative ¥ 139.7 billion. We extremely seriously take this fact. We will launch following appointments of our personnel. Please take out the middle section of this slide. I will remain committed to doing my very best to reforming Nidec. In order to have the current status of Special Alert Status lifted, we will do everything we can. I will return 100% of monthly base compensation until submission of the written confirmation of internal management system. As of today, March 3rd, Mr. Kobe, the Chairman, Mr. Kitao, Executive Vice President, Mr. Samura, Senior Vice President, Mr. Nishimoto, Executive Consultant, they have resigned from office as of today. In addition, First Senior Vice President, Valter Taranzano, has his job suspended, and his retirement process has started as of today. CPO, chief performance officer, will be abandoned as a position as of today. You can see the compensation will be reduced as follows beginning in March 2026. First, senior vice presidents, senior vice president and vice presidents, 50% of monthly base compensation for four months. With respect to the members of the board of directors, outside of board members, 30% of monthly base compensation for four months. Based on voluntary request, this compensation reduction will take place. Based on these personnel actions, as of the 1st of March and as of April 1st, there will be a major change to our personnel system. Based on the third-party committee's report and these personnel changes, all the business bases in and outside of Japan, we will make sure to make our company transparent, and we will rebuild Nidec. To be more specific, Michael Briggs will be in charge of ASM and MOAM business unit. Mr. Wada will be in charge of AMX business unit. We have the senior GM system. Some people will be promoted to the vice president's level from the level of senior GMs. This will be a one giant step for our bright future as a company. I, as a CEO, will take a strong leadership to unify this company. We need to regain trust from all of our stakeholders. As a company, we need to rebuild, fundamentally rebuild our governance system. We will check the configuration of the board by inviting individuals with corporate management experience and accounting expertise. We will build a management oversight structure that combines professional expertise with diverse perspectives. We will establish a truly sufficient and a mandatory supervisory system. In this third-party committee's report, we have received some factual information. We will promptly establish the Responsibility Investigation Committee. We will target the current and former directors and executive officers. We will investigate whether they bear any legal responsibility, including whether they breached their duties in execution of their responsibilities. The timing of the committee's establishment and its overview will be promptly disclosed once determined. It was last year, at October the 30th, that we established a Nidec Corporate Reform Committee. Based on the improvement plan and the status reports, specific improvement measures are currently being reviewed and implemented. Based on the latest report from third-party committee, we are promoting highly effective measures to prevent a recurrence by making timely revisions to the improvement plan. With respect to restoring the market trust, we will complete the establishment of our internal control system and submit the written confirmation of internal management system to the Tokyo Stock Exchange. Here's our upcoming schedule, but before that, I would like to give you some more information here on this slide. As of fiscal year 2025, the first half and second half year, we will have no division, year-end division. The investigation is still ongoing based on the material impact, this, I believe, will be the right decision for us to make as a company. For us to be able to restart the division process, we will stay unified. Please go on to the next slide. Dividend will be provided in the... and hopefully... Please look at this document, the impairment losses. There is a possibility that additional impairment losses may need to be recognized as derivative impacts of downward revisions to past fiscal years, profits and losses based on the findings of the third-party committee. This information has been disclosed just today. Next slide, please. As of our business situation, I would like to give you a brief summary of that. Since last time, we've been continuing to communicate with you that under any circumstances, we will not have disruption with our existing customers and our suppliers. Regarding business overview, our sales, manufacturing status, and also about our financing, I would like to give a brief update. The current order status remains strong, and there's been no major changes to our existing production plan. On the right-hand side of this table, under Q3, what used to be ¥ 6.2 billion in sales in the last year, Q3, has increased to ¥ 677.7 billion. At a total of ¥ 1.98 trillion levels as a cumulative total. Our production base are operating normally and have maintained a supply capacity. On the bottom right, regarding our financing situation and regarding interest-bearing debt, you can see from Q2 to Q3, we are at, ¥ 1 trillion and ¥ 1.2 trillion yen against ¥ 12 billion yen. That means, that a re-shuffling of debt, we have cash in hand of ¥ 500 billion. Plus cash and cash equivalent, is at ¥ 344.5 billion, became ¥ 890 billion. That is a borrowing of ¥ 500 billion itself, plus a cash flow on operation improvement of ¥50 billion. ¥550 billion improvement is included. Q3 is ¥ 890 billion. We are not tampering any commitment line of ¥ 600 billion regarding this cash situation. Well, as additional note, various disclosure that we shared on February 27th and March 3rd. This is our company's response, and we are waiting to receive the third-party committee's final report to continue to enhance our improvement measure. We plan to file the submit a confirmation of our internal control system on upcoming October 28th. Thank you. Now, I would like to take questions from the floor. For those of you with question, please raise your hand and please state your name and your affiliations. I would like to take as many questions as possible, so please keep your question to one per person at a time. For the press and for the analysts, this is a joint, we have analysts, and we have a press, present in this venue. I would like to nominate one each. I'll like to alternate. First, the press person. The male person sitting on the front row, please. Hello, I'm Hiraoka from Nikkei newspaper. Thank you for your presentation. Regarding the scope of a possible impairment loss of ¥ 250 billion, if you could please give additional information on that, what that would be, and the relationship with our current, this time's, accounting, inappropriate, practice regarding the timing of this impairment loss. I would like to have Nakagawa explain. I will provide additional explanation, too, as needed. Thank you for your question. The third-party committees reported, I mean, we are reporting at the same time, it can be confusing. First of all, this ¥ 250 billion is separate from ¥ 139.7 billion that came from inappropriate accounting practice that impact our equity. That is separate things. This third-party investigation on our wrong accounting practice will continue, not finalized yet, at the moment, that loss will be at ¥ 139.7 billion. The third party will continue to work to deliver the final results, we would determine the impact for every year. We will conduct impairment loss check tracking back to the past. That's what you're seeing right now. At this moment, we don't know by when and how much. We would like to first set a certain premise as a hypothesis and have made the simulation based on that. This is not necessarily a final amount. When we close our book once more time, and we will do a calculation once again, then we would scrutinize again about the amount of impairment loss. Let me add to that. As I mentioned in the beginning, this has nothing to do with inappropriate accounting practice. This time, ¥ 139 billion loss that we would go back to the past. That is a rough impairment loss scope that we have recognized now. Thank you very much. My second question. Within your, the third-party report, there was an explanation about the negative legacy. That is the same as President Kishida's comment. How is that situation today right now? What's you r awareness levels? Well, negative legacy doesn't necessarily equals to inappropriate accounting practice. That was mentioned in the third-party investigation report, press release as, press conference as well. It's a list of asset which can contain risk assets. For example, I was in charge of automotive business, and we were discussing a few times about how to recognize such a negative legacy in our book. In this time's investigation report, It's a first, it's a news for me, that this kind of a discussion were taking place in various different part of the company too. We need to put that in the right practice in terms of having a formal process and have a systematic approach so that we won't repeat this kind of a misconduct to happen again. That's my understanding. Regarding a negative legacy, what is the scale in terms of amount currently, and what kind of policy do you have regarding how to handle the negative legacy? Regarding how much is remains as negative legacy is not something that we have a clear understanding. In future, we will have appropriate accounting practice and accounting timing. Like self-funding or plan postponement, to have a phased approach in the impairment loss is not something that we would do everything to avoid. We'll be working together with the global operation teams to make sure that we'll have a firm process to prevent from this kind of practice to happen again. Next question is, we need to take from analyst. Person in the backshare, please. Thank you for taking my question. I am Takayama from Goldman Sachs. I have some question about numbers to make sure that there's no misunderstanding on my side. This ¥ 250 billion, this is of the past, and you have studied every year's impact, and this is amount of scale. It's not the wrong practice or errors. It's illegal, but this is something that you should have done. Is that how you're seeing it? Is there overlap to so-called negative legacy, to this asset scope of that is, this is a scope for the impairment loss of ¥ 250 billion? Please let me know your thoughts. I n the additional press release, it says additional loss of ¥ 23 billion. I'm not sure whether it's something that will come in the future or of the past. Let me first answer, Nakagawa to take the first part of the question and for the future from Minai. This assessment for the impairment loss this time, it has nothing to do again with an appropriate accounting practice. We have went back to the past because actual figures are being replaced. When looking at the future with the new figures, we now have revisited the forecast. Of course, we are validating the necessary impa irment loss every year, but our financial statement was affixed, revised this time, so we have to go back in the past and to check again. Regarding when we would impair each asset, that is yet to be decided. What we have discovered under the scope of investigation period, for example, the asset at the end of June end in 2025, how much of that we should book as impairment loss? That amount is ¥ 250 billion. I hope my answer is clear. This is because you need to revise the Yuho of the past. In addition to ¥ 139.7 billion, you would need to record impairment loss of ¥ 250 billion. There will be more of that? It really depends. We first went back to the first fiscal year and looked at the impairment loss booking was appropriate or not. We keep going back all the way to the five years in the past. This is based on our simulations. Regarding additional tariff impact of ¥ 23 billion, this is still yet to be seen. I mean, we are still investigating. This has to do with FIR misconduct, having to pay for additional tariff. We are investigating to see whether similar practice was taken by other overseas subsidiary entities. With those errors found, we would need to pay additional tariff, and that amount is ¥23 billion. That we will be paying in future. To whom is against what is regarding past five years of import, we were paying a wrong amount of tariff. This is ¥23 billion for the wrong filing of tariff duties of the past. When we investigate, investigation completed, when we know for which year we should have paid this amount of tariff, we would match in impairment loss, we have a provision for that to be ready for that payment. Okay. My assumption is that there will be a major negative hit to the OP levels, right? As you can see on our earnings call, we, there has been some sudden impairment losses. Based on that, we would like to mitigate those volatility, we need to have a regular booking on impairment losses when needed. That's why we are doing checks after checks, and we're doing that as soon as possible. When we reflect the revision necessary for the past financial statement, this is a probability amount that we need to book as a loss. And of course, we will need to get the external auditing regarding this cost. Are there still more negative legacy remaining after this ¥ 250 billion loss that you're going to book? As our President Mitsuya Kishida mentioned earlier, our current negative legacy will be solved all the way to cover to June 2025. That's what the final report will clarify. At that time, we will know how much is left. That's something that we need to give it another try. What I mean is, as Kishida mentioned, how much risk asset we have right now, we'll take the stock count. We'll have involved the expert too with our internal accounting team, our auditors and. Our auditing and supervisory committees included, will disclose that negative asset and what to do about it. Of course, we are doing business, so when there's risk, in order to minimize that risk, what kind of countermeasure we can implement, that's the first thing that we'll think about. Once we are determined that we need to have a right accounting practice or process and to book it as a loss, we will. Amount is not something that we know now. If I say one word, we can mitigate the risk for the future quite precipitously in our recognition. If I may, today, because there are so many participants, therefore please limit yourself only to two questions. This from journalist. From your viewpoint, the person from second from the left and third from the front wall. Ashihara from Kyoto Newspaper. Thank you very much for your presentation. Regarding the third-party committee presentation, I found the key that is for the reborn Nidec. One of them is not going away from Mr. Nagamori's influence at a glance. This to be very difficult, and it cannot be achieved overnight. However, the way Mr. Nagamori should be put behind, how are you going to do that? Sorry for talking about a very severe point. No, not at all. This is a very important point. When we established the rehabilitations committee, and as we have mentioned in the previous meetings, we have to be Nidec. We have to be who we are based on the corporate cultures and philosophy, and we have to respect them. Some of them should be handed over to the future in our recognition. Because for us, we needed to add more. That is, we have to do anything in the right manner all the time. Therefore, based on this concept, the recommendations, including the improvement document submitted by the rehabilitation committee or the Reform Committee, we'd like to apply this concept or split. Because we are going to do anything right, the processes, including the way we have done the business in the past, should be abandoned. However, we have to do it courageously, because doing it right, this should be the basis for the corporate culture to be at the center of whatever we are going to do. I'd like to share this split. Mr. Iminagi, do you have anything to add? No, no, not at all. I totally agree with you. First of all, doing right. This should be applied to all of the activities in daily businesses. In order to practice this split, we can consider what we have to do in what way. As you heard in our improvement plan that we have shared the other day, we will implement this improvement plan. But we have to walk the talk. Meaning that all of the employees have to do their work in the right manner, and we have to check the actual status. And then across the globe, all of the colleagues in the Nidec groups can follow this by getting aligned on this concept. And this is what we have to do. Thank you very much. In the interest of time, I can raise just one question. Right now, even now, Mr. Nagamori is one of the major shareholders. Therefore, do you see how you can eliminate the negative influence of Mr. Nagamori, and what kind of countermeasures you are going to take, if a ny? Thank you very much for your question. As you see in the report from the third-party investigation committee report. Yes, Mr. Nagamori is still one of the major stakeholders, and this may not change. However, for us, we have many stakeholders, including shareholders. Therefore, all in all, we have to consider how we can operate our businesses soundly. This is the most important thing for the company, we should not focus only on the part of the stakeholders, because the partial stakeholders should not distort our operations and the businesses. Let alone the smooth operation of the businesses, that is the best for us to establish process and schemes, we take this as a mission for us. Thank you very much. Now the analyst sits over there. I saw your hands up. Thank you ve ry much. I'm Sato from Morgan Stanley. I really appreciate your explanation. On the 14th of November, when the financial statements were announced, there were some discrepancies between those numbers and this time numbers. First of all, ¥ 87.7 billion impairment loss was registered in the first quarter. In addition to that, ¥ 139.7 billion and ¥ 260 billion losses happen. Therefore, how they have impact onto the net assets at the end of the first quarter of this fiscal year. That is ¥ 1.167 billion. We have to subtract ¥ 139.7 billion. This calculation is right? This is the first question. The second question is related to the change in the cash flow. Are there any changes in cash flow? I understood that there's no change in cash flow, please confirm these two questions. Yes, we have announced the financial statements on the 14th of November due to the impairment loss for the first quarter. However, this is a result of the third party... However, this number may change depending on the result of the third-party committee, and we said it in the disclaimer. However, after the tax, this now ¥ 877 billion have the impact on to the net asset, and this has been already incorporated. Therefore, regarding the next step, this time of ¥ 139.7 billion will be offset internally. In addition to that, ¥ 250 billion, although the timing is not clear, but this will have the impact onto the equity at the future date. How about cash flow? Both of them don't have any impact onto the cash flow. Thank you very much. Now, the second point. I'd like to know when the next the announcement of the financial statements will come. You said it's TBD, however, towards the next announcement, President Kishida, are you going to issue the internal governance report as the demonstration that your internal governance is sound and good? Thank you very much for your question. We'd like to share our financial statements as soon as possible in the correct manner for each quarter. We'd like to share the update for each quarter. We'd like to return to such a they should be status as soon as possible. As of today, as you heard in the third-party committee meeting, their final report timing is not finalized yet. We'd like to make sure that on everything could make it in time to ensure the no delay of the reports toward the shareholders' meeting slated for June. We'd like to make all-out effort to realize it. Regarding the internal governance report. You will make the description that there's no problem in the internal governance in that report. We have not found out that much. What we would like to pursue regarding to such targets, we'd like to hold the meeting to share the financial statements or financial results for the FY 2025 as soon as possible, and we'd like to make an all-out effort to realize it. Thank you very much. The next question, we'd like to take the gentleman in the blue tie. I'm Igami from The Asahi Shimbun. I'd like to ask about governance. The report of the third-party committee says that the diversity is not sufficient, including the outside officers. There are many people who had experiences as the bureaucrats. At the same time, there are not so many people who had an expertise in accounting and management, and how this structure is accepted, or why this generational structure was accepted, although there is no enough diversity, especially the former bureaucrats. For example, to like to establish better interpersonal relationships by hiring the former bureaucrats. Are there any influences about Mr. Nagamori? Thank you very much for your question. We'd like to reform our organizational structure from the very bottom, and we'd like to reflect it in our personnel change. You see it in the personnel change in the executives and officials, we have to respect the expertise, especially in the business management and accounting. They are essential. Therefore, as soon as possible, we'd like to proceed our reform to reflect this concept. Why we have had such organizational structure for this matter, from my perspective, I myself would like to reform this structure. That's what I say. How about the intention of Dr. Nagamori? Was his view reflected on this? Needless to say, Mr. Nagamori has served as the representative of Nidec. In addition to that, he has assumed all of the responsibilities for the management, and so is for the structures and members of the executives and officials. The reason why there are so many former bureaucrats and how Mr. Nagamori's intention was reflected, for example, two person from MOFA, another two person from MOF, why those former bureaucrats were hired? Are there any criteria to hire former bureaucrats? Regarding the selection of the outside officers, there's a so-called knowledge matrix, capability list put in place, therefore, we refer this to determine the members of the executives, we have made it open. Regarding the responsibilities of the outside officers, what do you think about that? We see the handling of the executives. However, there are different treatments for officers and executives, I know there are background reasons. Regarding the outside officials, what would you do? Including outside officials, responsibilities of the executives, we need to consider them even for the future. As you saw in today's presentation, you saw the change in the executive structure, and therefore, as you said already, in the future, we'd like to assign a person who has good experiences in the business management as well as the expertise in the accounting. We'd like to reinforce our top management structure, and this way, as you saw in the previous presentation, we'd like to establish the Responsibility Investigation Committee in the very near future, where we'd like to investigate how the person involved has taken his or her responsibilities legally. We'd like to investigate it. And based on that result, we'd like to take the robust actions. The target is not the former and current executives. All of the top executives should be covered by this investigation. In the future, we'd like to take these opportunities to explain the accountability and the legal responsibility objectively. In order to do that, we'd like to conduct good investigations. Sorry for being so persistent about it. However, regarding the existing executive with the, because of the commitment to the accounting accounts, depending on that, there are different treatments. For example, self-resignation as well as the suspension of the duty. These two applied to the overseas executives. Because of the local requirements, local legal requirements, we have to take these actions, and this is the reason. Those who resign him or herself, there were a severe commitment into the accounting misconduct. That's why he resigned on his own. I didn't understand what you'd like to know exactly. Regarding the suspension of the duty as well as the self-resignation, I believe that the influences are the same. That is our commission. As he mentioned, regarding the suspension of the duty, we have to comply with the local applicable laws and regulations. That's why we didn't say that in a self-resignation, because this is not in compliance with the local legal requirements. The next turn is for analysts. I'm Akizuki from Securities and Finance. I have two questions. First of all, this amount of ¥ 139.7 billion, you said there was no breakdown that you could share this time. On the other hand, the target of impairment loss is mainly from the automotive businesses, and therefore, this amount of ¥ 139.7 billion, in order to get a clearer image, if you can share the segments as well as the target businesses, if you can share those information, that really helpful. The other question is, in addition to the question one, this amount of ¥ 139.7 billion of assets, or the assets will be reduced because of the impairment loss. In addition to that additional ¥ 250 billion reduction happens, and then, I don't know the level of the profit. However, ROIC must be really high. Operating profit is right, and then, based on this prerequisite, ROIC should be very high because usually, especially for the manufacturing companies, your ROIC must be really higher than usual. Comparatively speaking, probably your impairment loss is too aggressive. That is the outside view. This is accounting treatment, and therefore, it can be arranged. I believe there are some people who are leaving the office. As a negative aspect, I believe there will be a future possibility for such assets to be calculated. How are you going to secure profitability in the future? Nakagawa, please go ahead. First of all, in terms of scale of profitability and in which area of businesses, please go to page 163 of the document. You can see the amounts in individual businesses. Small business, modern business, ¥ 1.3 billion. Attraction and AMEC Organic, ¥ 5.74 billion. ¥ 8.6 billion. AC, ¥ 15 point some of several billion yen. Group companies is ¥ 39.3 billion. That's the breakdown of ¥ 139.7 billion. You can see how much additional amount will be made based on this calculation. When it comes to ¥ 250 billion, which is the second amount, it's approximately ¥ 250 billion to be subject to financial impairment. We need to recalculate and reexamine the exact situation in detail to understand the exact amount of this, assets to be subject to the financial impairment. We need to go back in the past to understand a proper way of doing businesses, and we need to discuss with our auditors to come to conclusion. I'm not sure about this correctness of this term, aggressive or not aggressive, but these are what we are doing at. As has been explained by Mr. Kishida a few minutes ago, this is basically in a primarily in connection with the automotive business. If there is any financial impairment, and there was significant reduction in the future amount of such impairment, a goodwill is also included, if I may add. Thank you very much. There is one more question from me. You, I believe, announced the midterm business plan, the plan was unrealistic according to the comment by the third-party committee. You may not want to hear this, did you announce the midterm business plan realizing the plan itself will be unrealistic from the outsiders, those will be looked very aggressive. As an analyst, I thought part of the plan was rather unrealistic. As you announced the midterm business plan, objectively speaking, did you think that the plan was unrealistic, or did you accept the plan as such were you willing to achieve the target at that time? That was a very deep question. Thank you very much for that. Far in the third-party committee's report, there is a reference to that from a different perspective. With respect to the midterm report we submitted, Mr. Nagamori said that it's a very conservative plan. Basically direction, we should have a slightly stretched target. Back then, we thought that if we stretch ourselves a little bit, we will be able to achieve the target. That's what I thought back then. I believe you understood some points we have made in the past. In addition to active investments, infrastructure in IS, for example, to connect information with other piece of information. Looking back now, I believe that. We have to cover more than 300 business bases, as has been explained by third-party committee. We need to build infrastructure to connect all of these bases. That was actually the basis of our midterm business plan. We believe that's part of our target at this moment as well. When it comes to figures, given the current circumstances, we need to re-examine. We'll be able to provide you with the realistic figures in the future. That is all from me. Thank you. Next person, someone from the mass media. From your right, the person up in the front, male person here. I'm Murai of Diamond Publishing. Thank you very much for your explanation. I'd like to ask you about Mr. Nagamori. He resigned the office from the chairperson emeritus. How is he now? When he became chairperson emeritus, he was a non-full-time executive. What is the difference between then and now? I believe the chairperson's office now is now gone. As chairperson emeritus, he was receiving a salary, but not anymore, I believe. What are we... What are the major differences between then and now about Mr. Nagamori? What type of thoughts, feelings do you have now about this third-party committee's report? You have worked with Mr. Nagamori. You became president after being promoted by Mr. Nagamori after giving a positive e-evaluation by him. Now, Mr. Nagamori is being accused, criticized. You were taught by Mr. Nagamori in one way, I believe. What thoughts do you have about Mr. Nagamori? Thank you very much for your question. To Murai was superficial differences, physical differences between then and now about Mr. Nagamori is no longer a chairperson emeritus. He's no longer receiving money or salary from the company, and his former office, based on his will, is now being reorganized. It will be removed from the company to somewhere outside the company, in my understanding. That's the major physical changes between then and now about Mr. Nagamori. It's been four years since I joined Nidec. In the first year, I was overseas. I became working closely to him and having conversation with him only after I became president two years ago. In fact, he taught me a lot. In this company, it was totally different from my previous occupation. I learned a lot. I learned a lot about this company's corporate culture. I need to understand what to master. I received several important lessons from him. Now we have received this report from third-party committee, so it's a very candid, straightforward report about him. I honestly was surprised. My own mission, as I've said at the beginning of my presentation, is to unify very strong technological capabilities with sincerity of Nidec employees. We need to make this company more global and better company. I would like to dedicate myself for that purpose. That's what I have thought so far, and I'm going to have this thought more strong, strongly than before. Mr. Nagamori's, his office is gone, as you said. Going forward, in the past, Mr. Nagamori, as the founder of the company, he would like to visit the company, you know, sometimes when the timing is right, et cetera, as the founder of the company. Is there going to be such interactions between you and Mr. Nagamori going forward? It has been said there is no plan like that. When did you see Mr. Nagamori last time? When he quit, Chairman Emeritus, the morning of December the 19th, I was contacted by him. That was the end. That was the last time that I communicated with him. Are you going to meet with him? Not in my schedule is there s uch a plan to meet with him. Thank you. Someone in the audience? Don't. Someone in the front of mass media. From your left, second row. The fifth row. The lady over there. I'm Nagayo, TV Tokyo. I would like to give you two questions, Mr. Kishida. First of all, about the contents of the this midterm business report. What are you going to review, based on the third-party committee's report? There are quite a few points made by the Third-Party Committee's report, the departure from Mr. Nagamori's business method among others. In addition to all the points you have made already, what are the additional points you would like to make as changes or improvement? Thank you very much. First of all, in the Third-Party Committee's report, we have this improvement plan. I believe the direction of the improvement plan has been endorsed. It's a very. That's something that is recognized very strongly. In addition to that, what we need to achieve is a shift from Mr. Nagamori's company to a different and a better company. We need to establish a process for the shift. That's the important mission, theme for us. It says Mr. Nagamori in the third-party committee's report about, we as a company, we need to improve our corporate culture. We need to improve our corporate systems. That's our major and largest mission for us. Some of those actions may take time, but we need to do everything correctly. That's the center of our mission as we go forward. We'd like to brush up our improvement plan as we go forward. Do you have anything else to add, Maesan? Mr. President, it's absolutely right. In addition, if I may add something, from the third-party committee report, there's a strong mention about, particular emphasis on the supremacy and restraint. I believe that's quite important. Especially our auditors and outside auditors and all the internal auditing department personnel, they would need to strengthen the governance within our company and work together, integrate, and to strengthen the problem awareness mindset. When they need support, those outside resources, needs to be available. That kind of working environment needs to be better prepared. We do recognize as a company, we need to create a better place to work, for those who are in charge of auditing activities. I myself as deeply feeling that we need to rely more heavily on outside directors' opinion and also we need to seek expert as well. Outside directors bears legal responsibility as well, also in this third-party dialogue, including audit, we need to strengthen these quality of review mention that we passed to auditing entities. That needs to be a part of improvement idea. Thank you very much. Second question is Hirao-san mentioned in the third-party committee report that he has uncovered so many numbers of accounting mispractice, malpractice. Even under the significant pressure from Nagamori-san as the president for the entire company, this fraudulent accounting was a commonplace for the entire companies, it's become your entire corporate culture. I think that concept is already permeated within, ingrained in the companies. Is that something you can change? I'm taking this report from the third-party committee quite seriously, I understand that from a long time in the past that this kind of accounting practice, wrong accounting practice, were done at many different sites of our companies. As a company, we must develop measures to prevent this kind of practice from happening ever again. To respond to the capital market and all the partners and all the suppliers and all of our stakeholders, we need to respond to their needs sincerely and taking this report firmly to come up with solid improvement ideas and act accordingly. President Kishida, this fraudulent accounting has taken a root already in your organization. What do you think about that? Are you aware of that? Well, there are many new discoveries for me after receiving this report. As a president and a CEO, I was not fully grasping the scope of this kind of practice taking place within our organization. I regret that quite seriously, I need to look at this fact straight on so that I can implement the improvement measures and systemize it so that we would never repeat this kind of incidents happen again. Now I'd like to take questions from the floor. Hello, I'm Miyajima from Monthly FACTA. In the investigation report says what's the key for the improvement is outside directors, strengthening outside directors' governance. There are many outside directors they needed, and they didn't recognize there was such a significant pressure coming from the top of your organization. Regarding this significant amount of negative legacies, they weren't aware of that either. I think they were not doing their job. It's clearly, their dereliction of duty. I think you need to clarify the kind of penalties that you'd be requesting to the outside directors because they were not doing their job. I don't think otherwise you can start your revitalization process in a proper way. I think they need to file their resignation letters or, all these retirees from tax agencies and the Ministry of Finance, all those people, they have created some group of superpowers. That's what the report says. One more thing. The presidents were, back then, before you, were reporting to the chairperson, but they're being ignored. At that time, usually president should consult with outside directors, but they weren't doing that. That's a wrong governance. Governance is not working. This is really equals to a breach of the outside director's duty. It's they're not doing breach of a duty of care. I would like to clarify about the kind of penalties that you need to impose to those people who are not doing their jobs. Usually, when a company faces serious incidents like this, usually directors goes to outside director for consulting, but didn't happen. Thank you very much for you to point out this very important point. It's very serious. I myself do recognize that I need to consult and leverage our experts, outside directors' opinions. As this report mentions, the quality of information that our companies were providing to the outside directors were not all that great. Didn't raise the alert concerning mindsets amongst outside directors. I myself did not act enough to seek support from outside directors. All the directors included, including outside and full-time, including legal responsibilities, we would investigate what kind of penalties needs to be imposed once we establish the Responsibility Investigation Committee, including legal responsibility too. Thank you. Thank you very much. I'm Furukawa from Bloomberg. I have two questions to President Kishida. Before you start this press release, this Securities Investigation Surveillance Commission announced that there's been a possible infringement. It may even violate the Financial Instruments and Exchange Act. Third-party investigation committee, Hiroshi mentioned that there is a misrepresentation in the statements in the Yuho as well. Is that your understanding as well? Regarding the first point of the questions, I have no ideas about us infringing this Financial Instruments and Exchange Act. I will look up this report and to confirm what is the situation, what's the claim. Second point regarding Yuho's security reports. Are we going to go back to the past report and make the revision? As Committee Chair Hirao mentioned, I do recognize that when the Yuho needs to be revised, we will. We need to. After receiving this time's investigation report, once we know the amount and the timing of the revision necessary, we would like to conduct a change. You think that the current misconduct would require changes to the Yuho security report? If necessary, we will. Thank you. The second question, regarding these currently implementing various reform because you are determined to maintain being listed. I would like to ask, Mr. President, do you think that being a listed company is essential? If so, why? Thank you for your questions. I myself and for the company today, for October 20th's report that we need to file to the authorities, is we are working to get delisted from the security, our stock as a Security on Special Alert. There are certain choices of going private too, and I think some companies who are in a similar troubles did consider such measures too. At the moment, we are designated as a Security on Special Alert, our first effort is to be delisted, dedesignated as a Security on Special Alert. I'm sorry. My whole question is the reason for maintaining the listing in the stock exchange. What is the real reason? We maintain large extensive fundraising capabilities and also resulting in a broader business canvas, I'll say. If you have anything else to add, please. I'm okay. Thank you. You are comprehensive. Hello, I'm Sei from Asahi Newspapers. I would like to ask questions regard to confirm. Chairperson Kobe and four others are resigning on the press release, but resigning from the position but will still have a position in the company. They all resign from the company. They still do have some roles in the subsidiaries. Including those roles as subsidiary, they would exit from our group. They don't have any seats in your company as of today. Correct. Thank you. My next question is regarding the legal responsibility of your directors. To pursue that, you will establish the Responsibility Investigation Committee. You said swiftly. By when you are going to launch that, and what kind of study this Responsibility Investigation Committee will study? What will be the scope? Would Nagamori-san be a part of the investigation as well? Let me give it a first try in answering it. Please get provide additional information. Now that we are receiving this external party, third party's committee report, Existing and the past director executive officers. We will study the legal responsibility of those management levels, including the opinions from outside experts, with objective viewpoint. We are already selecting the nominees, people's makeup, for this investigation committee. Responsibility Investigation Committee. As long as we know more, we will share it with you. Are you going to possibly file for possible damages before possibly face a claim for something that is driven by shareholders? Class lawsuit. Thank you. We are considering various options. One more questions. In this report, there was comments about President Kishida regarding the settlement of negative liabilities, process of negative liabilities. In 2024, Kishida-san mentioned to Nagamori-san about the need to process negative legacies many times, but Nagamori-san said, "No." What does that mean? What really happened, Kishida-san? Would you please explain with your own words? Thank you very much for your question. What is negative legacy? That's something that we explained already. It's not that the entire negative legacy equals all the misconduct in accounting practice. I myself, since I joined this company, regarding the businesses that I was leading, had a certain structural reform. At that time, I didn't know there were over 300 subsidiaries. Back then, various businesses there, we had to consolidate some of the manufacturing plants. That need was definitely there as a business unit leader. Under this slogan of structural reform, I kept mentioning about the need of that many times to Mr. Nagamori. This time, the third party's committee report mentions is about the one of Nidec's business, about the automotive business regarding the processing of a structural reform outside our operating profit layers. It will be the extraordinary loss, if any. It won't be within the OP, above the OP line. It will be outside this, you know, OP target under this enormous pressure. A part of what should've been processed was not something that was executed within that given fiscal year. That's what I mentioned. Whether everything is a result of the accounting misconducts or not, it's not clear. As a result of all of these activities, there are legacy liabilities. You are aware of that as the person in charge of the businesses, and therefore, what kind of wording or phrases did you use to appeal for the necessity to disposal? Can you please explain the situation? Regarding the situation, including interviews and the forensics, this is part of the investigation, therefore actually seen, and now what kind of discussions went on, everything was captured in the report by the investigation committee, and therefore there's nothing I have to add or I can add. Sorry, please limit yourself only to two questions. All right. Thank you very much. The person in the front row here. I'm Takeuchi from NHK. Thank you very much for this opportunity. Including Mr. Kobe, there were four people who resigned the company. This time, regarding Mr. Kobe, based on the points identified by the third party committee, Mr. Kobe should be regarded that he was aware of the misconduct, accounting misconduct in the planned manner. That's why this treatment was given. However, including other executives and officials regarding this fraudulent accounting as well as the recognition of those misconducts, did they recognize all of them? Because now there are high involvement, and that's why these people had to resign the company. Thank you very much for your question. Regarding the report issued by the third-party committee, if you see the actual name, all of them are basically the executives and therefore non-executives such as the officers. I cannot explain the specific descriptions. However, as the executive side, we reviewed the contents of the report, and based on that, we made this decision, and we have shared that decision today. Thank you very much. The other point. Regarding President Kishida, you made the recommendations over and over again to Mr. Nagamori. Despite of those, the repetitious recommendations, all of your requests were turned down. How did you feel back then? After being turned down your requests, there was nothing conducted. Therefore, even though it's the kind of the objection opposition to Mr. Nagamori's intention, however, you had to proceed with the proceeding according to the report by the third-party investigation committee. What did you think? What do you think? Thank you very much for your question. Right now, I would deeply regret that, and I should go furthermore, because for four years after joining Nidec, I tried to normalize the asset quality of the company toward the future sound operation of the assets. I'd like to lay the foundation for the future growth. Every time, everything I tried to do was not executed. I had to go deeper to give the in-depth insights, probably, or I should have been able to do something more. This is very regrettable. In order to prevent such things from happening in the future, I'd like to make my resolution anew. Thank you very much. The person over there in pink shirt. I'm Takaoka from Nikkei xTECH. Regarding the selection of Mr. Nagamori, is to nurture the copy of Mr. Nagamori, and that is the process for promotion. That concept is represented by President Kishida sitting over there. Because there are many Nagamori, or the copied Nagamoris, mainly the executives and officials, and then, there are many people still remain in the company. Therefore, I wonder whether you can eliminate all of the misconduct, including fraud accounting. Now there is no more Mr. Nagamori. Still, Nidec can maintain a high profitability by growing furthermore, both at the top line and the bottom line. Thank you very much for your question. I take the situation quite seriously. Of course, now the company should be business concerned, and therefore can we eliminate anything totally to move on to the next step. It's impossible because there are something we have to inherit, especially in the manufacturing company, and therefore, we have to make the selection and concentration to determine what we have to take over. I believe we can achieve the high profitability. I myself would like to stick to that concept. I believe we can turn Nidec highly profitable company once again. You have to set a high target, otherwise you cannot expect growth. How you define the high target regarding the growth, if the target is high enough, can we achieve that high target? No way, because we are manufacturing company. We have to sophisticate our technologies through the discussions and dialogues with our customers. We can generate something new, totally new that has not yet existed in the world. We have to generate such noble products. In order to do that, we have to develop our technologies and human talents. I believe that Nidec can be the highly profitable company after rebirth. It's interesting. However, there are many impairment loss related to the automotive business, and I believe this is actually related to E-Axle. What is the actual situation of E-Axle right now? It's a rumor, however, you have stopped new development. I don't know whether it's fact or not. Right now, this E-Axle, as part of the automotive business, can you please explain that? Because we see so much development in the EV. Did you see the sales increase or the increase of the production units? There was no such announcement, I'd like to know the current status of the E-Axle. Thank you very much for your question. There are mainly two sites for the businesses of the E-Axle. One is at the joint venture or NPE. This is a joint venture with Stellantis, where the manufacturing and the business development were done for E-Axle. The other site is in the joint venture with Kaisha Kisha in China. We call this company GACC. Joint venture of GACC is the other manufacturing site for E-Axle. Regarding the production in China, as of today, Japanese company related to the joint venture of the government of a Chinese company. Right now production level has been stabilized, and therefore, based on this site in China, probably Japanese company or Indian company can be a partner to develop new products for our customers. You still work on new development, is that right? That's right. We don't discontinue the new product development. Thank you very much. The person in the third row over there. The second from the right. Yes. Thank you very much for raising your hand. I'm Tokuda from Toyo Keizai. Thank you very much. First of all, as you mentioned, there were five officials resigning the company. Because their influences, negative influences over the corporate culture will be huge, that's why company has determined to ask them to leave the company. Is that right? Yes. The people who resigned the company this time, it's a result of our managerial decision, because their influences are quite huge. Regarding the operation of the business, they have had high influence over the businesses and in order to change our operations in a new way, their resignation is essential, and that is the business management by considering many things comprehensively. Thank you very much. Next, I'd like to ask about the future generation, because pruning may happen. However, thanks to M&A, you have grown this much. However, when I refer the improvement plan, you said regrettably that the management of many M&As were poor and therefore, for the future, you have to be lean. Do you do anything to be a more lean organization, including BUs and the sites? Thank you very much for your question. I believe previous question is quite similar to yours. In our midterm plan, further, bigger scales M&A and then a further, growth should be there. Before that, we have to integrate and eliminate unnecessary manufacturing sites and the businesses to be more lean. In addition to that, we have to make a system investment, and then we can put together necessary information that should be the basis for the future growth. That is our intention. You can see that policy in the report. Even after receiving the investigation committee report, this policy will be maintained. When I look at the message of Mr. Nagamori as the Chairperson Emeritus, he will work on the human development as one of the dreams. As Nidec, he will still be involved in the human developments, or there's no involvement how Mr. Nagamori will be involved or not involved regarding the human development at Nidec. It's not their intention. He has the schools and the other educational organizations, and therefore, we assume that now he will focus on these institutions, not Nidec. Thank you very much. Any other questions? Yes. Person in the fifth row on this side. Thank you very much for raising your hands. I'm Nomura from TV Tokyo. Regarding the recognition or awareness of the accounting misconduct, President Kishida was described as he didn't recognize the misconduct, the accounting misconduct. How about Mr. Nakagawa, is that true? Suppose that you didn't recognize the accounting misconduct, how you should assume the responsibility as executive? First of all, I'd like to answer to your question. After that, Mr. Nakagawa will answer to this question. First of all, to me, I believe I have to assume the managerial responsibility. That's why, regarding the this time scandal, I'd like to give a much deeper thought to take actions, or I should have get involved deeper to take appropriate actions. Including this, regarding my own policy, I spontaneously or voluntarily return my remunerations 100%. Still, I'd like to get involved in the management of this company. Mr. Nakagawa, please. According the report. There has been the huge pressures imposed on to the all of the employees. I don't have any personal recognition of this accounting misconduct. I try to reduce the financial costs as main activities of the financial personnel, I was immune to that pressure. Thank you very much. It's my turn. I don't have a recognition of accounting misconduct. Regarding the pressure for the business performance, I'm aware that the pressure on to the better performance was very strong. Whether that related to the attitude of that or not, I wasn't aware of that pressure. You mentioned that there has been strong pressures across the board. To you, what kind of pressure you were exposed to, including how you felt at that time? Can you please share the specific wording and how you felt? I'm a member of administrative department, and therefore, I don't have a direct pressure regarding the performance. However, every year, I saw that now the all of the business units have to set up really high targets each year. That's how I felt. Thank you very much. I see many people still raising up their hands, but now I'd like to cover you row by row. First of all, the person in this row, please. Thank you very much. I'm Yamamoto from Nikkan Jidosha Shimbun. I'd like to ask two questions to Mr. Kishida. First of all, toward October. Sorry for asking qualitative questions, but are you sure that you can get away from the current status in October? Regarding the cultural change, it's really hard to capture it quantitatively, and therefore, how the organizational structure should be and how the corporate culture changes. It's not only the structure, but also you have to walk the talk. How do you take it? Just one question. Thank you very much for your very precious question. When it comes to the set date, October 28th, we will make sure to achieve our task by that date. There are quite a few hurdles go over towards that goal, but we need to be cooperate, working together with other people concerned as we go towards, and go towards that goal. We need to change our culture, corporate culture as a company. It will take time. I do realize that. First of all, in our improvement plan and towards the deadline of October 28th, for the next eight months, there are things need to do, and there are quite a few things for us to do in the next two to three years. We need to make such a roadmap. We need to share the roadmap firmly among those concerned. That's what's important in my opinion. We need to visualize the status. We would like to share information with everyone involved in this process. Thank you very much. Related to my previous speaker's question, you need to bring some masculinity. You need to make your organization stronger. As necessary, you borrow some capabilities, some help from the outside. Do you already have any specific plan for that? Thank you very much for your question. In that regard, we have gone through M&As, and we have constantly been growing as a company. That's the history of our company, Nidec. At least, during this time, we need to be firmly steadfast and committed to our belief to understand what we need to do. We need to introduce our new ROI system, based on that perspective as well. We need to review our management system, and we need to make sure to work on those various issues. Are you going to differentiate the core businesses from non-core businesses? Yes, exactly. As part of our midterm business plan, we have core businesses and non-core businesses. We have future hurdles to go over. We need to understand what's currently profitable as businesses. Beyond that, as a manufacturer, we need to understand, we need to anticipate the future. Towards our future goal, we will make firm steps going forward. Thank you. From your right, the person over there, the far right. Thank you. Thank you very much for your explanation. This is Naito of Citigroup Securities. I would like to give you two questions. First of all, with respect to AMEC business unit, what was the problem with the business unit? What would be your opinion about for improvement? According to the third-party committee's report and improvement plan, I believe the major problems lies with the AMEC business unit. We have been tracking AMEC business unit profitabilities. Do you think you have to downward make or downward revisions about AMEC's profitability? What would be the major reasons for the current struggles of this AMEC business unit? What was the reason for you to have to incur negative legacies? Can you provide us with your opinions? Thank you. With respect to AMEC, our automotive motor business, the scales of investment is huge compared with the other businesses. The financial impact is huge, is that, it tends to be regarded as issue generators, problem generators. They are in a very, currently very severe competitive situation. In the past, we have been trying to reform the business unit, AMEC business unit. We are continuingly making efforts to improve the business. As a motor business, we have automotive motors. You have to have high-quality motors, high-quality performance, level performance as well. Technologically, it's very difficult to make these automotive motors. We will continue to produce those motors together with the other motors that are difficult to make. That will be part of our product portfolio we need to reexamine. I believe the Project company have had some problems in the AMEC business unit, et cetera. It's not that the M&A has had problems within our Project companies. Within this, ¥ 250 billion goodwill is included. Goodwill as of M&A could become at zero in value. Not only our own business, but there are quite a few parties to businesses whose issues have to be solved. Thank you. There is one more question which is related to the previous speaker's question. With respect to cost, it's about. A strategic investment is very important, as I understand. In order to make yourself a very new rip on Nidec, are you going to make investment in human resources or infrastructure? What type of cost increases are you expecting to see occur in the future? In the end, we need to be able to disclose our midterm business plan. That will be the right time for us to answer your question in detail. My gut feeling as of today is that 1% infrastructure investment in human resources, for example. We have this more than 300 business entities. We need to consolidate them. We need to educate people to do the right thing when they work, as they work. We need to increase our investment in such infrastructure. That's what we need to discuss internally. Thank you very much. It makes a lot of sense. Thank you. The second person from the right. The fourth person, male. This is Iwao, TBS News Broadcasting Station. Thank you very much. There's a huge financial impact that will make a huge impact in your own company as a whole. As you try to rebuild Nidec, you may decide to shut down factories, you may lay off people. Would that be a possibility? Thank you very much for your question. Production facilities and the larger scale consolidations, we are not making any of that yet. In our day-to-day operations, we may decide. We will continue to work on consolidations and improvement of our businesses operations. With respect to business consolidations, portfolio reviewing will take place, we may realize a larger scale of a need for reforming portfolio. We will have no sanctuary as we go forward with our reform efforts. Thank you. The person from there in this row. The third person from the top. Thank you. Thank you very much. I'm Yamada with Toyo Keizai, a magazine. I have two questions for you. First of all, I would like to know what has been done in this secret audit report or investigations. Based on Mr. Nagamori's secret request, there was a person on a special missions. This part is very black in my opinion. Nothing is very clear. In other words, I believe there are some facts hidden here. As of now, as a company, what did you find, and what information do you have about this special mission? Special mission audits, I do not know anything about them. I do not know anything more than the reports report established by the Third-Party Committee. It may be difficult for you, but do you have any plan to investigate into these special audits as a company? With respect to the contents of special audit, I do not have any plan or thoughts about it. My second question is as follows: With respect to the negative legacies, according to your explanation rhetoric, you did not understand any misconducts. Of course, the third-party committee says not everything was a misconduct, but with respect to the negative legacies as a whole, there were quite a few issues and problems. Kishida-san, you Mr. Kishida, you yourself had some very strict request to Mr. Nagamori. Did you really not recognize the misconducts, but did you think that to some extent such misconducts will be okay? Did you have such a recognition or did you not have such a recognition at all? That's a very important point you, that you pointed out. In the third-party committee's report, I am referred to there as one of the individuals to be mentioned in the report. I need to make one step further. I should have made one step further to try to address those issues. That's something that I'm reflective of. In order to prevent a recurrence of such misconduct, we would like to build a new Nidec as a group-wide project. Thank you. There is one more question from me related to the first question. With respect to the corporate reform, corporate culture reform, we have people from Diamond Publishing and from us, Toyo Keizai publishing. Some of us have been prohibited from contacting you or visiting you. Now we are allowed to be here, and we are grateful to be part of this press conference. Are you going to try to. I believe Mr. Nagamori's personality was to refrain from communicating with such a highly critical mass media media outlets. I don't want to do that, Mr. Kishida. Can I ask your opinions about this? It's a very important opinion. Thank you very much. In this meeting as well, we like to have as many people as possible. We like to have many opinions from as many people as possible as we try to operate our businesses. That's my strong determination. Going forward, we like to have opinions from as many people as possible. Thank you very much. Ito from Nikkei Business. I would like to ask you about how you recognize the need for governance. In the third-party report, it says up to August 2025, your power was quite limited. The final decision-making, especially in the personal matters, were given to Mr. Nagamori. The president and CEO's authority were quite small. Did you ever question about the level of governance? Did you and any other management levels ever questions the all the powers concerted to Nagamori-san? I became a president in April 2024. In June 2024, we became a Representative Director and President and Executive Officer. Until the August 2025... Third-party report states that all the final decisions were made by Mr. Nagamori. That is true. From 2024 June onwards, I was on a role as Representative Director, President, and Executive Officer. I have no intention to indicate that the kind of responsibility, the tasks that are bestowed on me were anything small. I do believe that I was fulfilled my role as a CEO. In order for this company to truly revitalize itself, I would like to put my all in this effort once again. This is a question to Mr. President Kishida, as well as all the top management levels. Final decisions belongs to Mr. Nagamori. That was a common sense. How was it perceived by all? First year of becoming a president is really a transitional year in many ways. I do recognize there were issues in our company and actually starting to make change to our internal approval systems. That started around that time. Actually, the time that the responsibility was given to me was not until the 2025 August time. There's been a discussion that how to transition and pass this decision-making power from Nagamori-san to myself. It's been discussed for quite some time. Under the new management leaderships, how to manage and how to set the right decision-making authority. We need to establish operations and systems and processes based on these learning. Hello, I am Kishi from Major Market. Regarding getting delisted, that is an option for some companies too. If that's the case, I would think that the investment plan are activated. I wonder whether they are making unwise special proposals like that? You would like to maintain the position of a listed company, going forward, I wonder whether you are saying definitely no to going private or else? Upon the filing of the internal audit plan, structure confirmation documentations, we are aiming to be de-designated as the Security on Special Alert. That is our first priority. We have no intention of going private at this moment. Thank you. I'm Kato, I'm a free journalist. I have a question regarding audit. First one is in the third-party report. The fraudulent report, dishonest report information shared to the audit firms. CFO is now resigned. The report says that there were comments like many incidences like that, misinformation, misrepresentations were found from various different parties, it looks like it's a corporate culture. I wonder have three of you recognized the same. What do you feel? Finding, seeing the current accounting firm as a easy target to persuade. I have no sense like that against the PwC Kyoto. I echo the same opinion as the president. Okay, thank you very much. Another questions related to audit. You have switched from a company with audit and supervisory board to a company with a committee. 10 years ago, you have established audit and supervisory committee and they supposed to do a organization audit. Does that mean that the shifting to committee level was mistake for you? It would have been better to depend the audit's responsibility to a single person, highly independent board of directors, don't you think? I also need to improve my capability as an auditor, as a member of the audit and supervisory committee and taking on the lessons learned from the report of third party committees. We would like to carry out the various improvement measures to manage this business better. Hello. Tsushima from Diamond. I have a question to President Kishida. Regarding your responsibility as a business executive officer regarding business execution. You joined Nidec in 2020, then you became a VP or CEO of Europe of AMEC business. In this time's impairment scope, the biggest one is against the AMEC business. You can't be forgiven just by saying, "No, I didn't know." I think you were in charge of meeting the business target. I understand that the relationship with Mr. Nagamori deepened only after you stepped up as a president. Regarding your execution responsibilities, I wonder, what were the difference between those who resigned and you remaining as a president? I don't think it was something that some people were forcing everyone to come up with those numbers and some were bringing in. I don't think it's that simple. I joined the business actually in 2022. Ever since I joined this group, I've been proposing various structural reform and try to drive that reform myself too. The first business that I joined is Europe, Nidec. I was given a specific task to handle various claims. I've been continuing to do so until today. I would like to go 1 step further and to revisit some of the measures that I have implemented. I could have done a step deeper and been told to do it differently. That's something that I take quite seriously. I will continue to work toward the soundness of this company's assets management and make operations more efficient. Thank you. My second question related to the first one. From outside perspective like us, when trying to revitalize a new company, I think it would only make sense to bring in a new person to lead that organization. Mr. Kishida, some of my colleagues called you as a miniature Nagamori. You were appointed by Mr. Nagamori. I think you are considered as a person, undoubtedly who helped encourage Nagamori the way he was. I wonder, what kind of feeling do you have against those claim? I never saw myself as a miniature Nagamori or copies of Nagamori. My most important effort is to redesignate Nidec stock as currently under Security on Special Alert. That is the most important theme for our management. That's what I'm fully concentrated on achieving. In this report, there were quite a few hard comments against Mr. Nagamori, and it makes sense because he was the head of your organization. It also can be read as if Nagamori-san is the only one who's doing this wrongdoing. What about the responsibility of outside directors? Have a question by my colleagues. What about the executive management, including President Kishida, your business execution responsibilities or each business responsibilities heads? I wonder whether you are purposely directing all the responsibility concentrated to Nagamori. I understand your point of view, but I personally think that this report is not about that, only blaming Nagamori. Rather, for us, the business manager, it contains a lot of good ideas, suggestions, and improvement measures, advices. The starting point of the improper accounting practice started from Mr. Nagamori's. Regarding company structure, mechanism, process, and cultures, what kind of those things led to these incidents were mentioned clearly in this report. We will take this report as a serious lesson learned and try to work as one unit, the entire company together to turn this company around. Hello, I am Kurokawa from Sankei Newspaper. I don't mean to repeat my colleagues' questions, but regarding this Responsibility Investigation Committee's future activities and how Mr. Nagamori and how other people who led to improper accounting practice, this committee will investigate the legal responsibility. Once they were found guilty, is it true that there may be actions taken, such as filing a lawsuit seeking damages? Let me take that question. Thank you for your question. That is very much the task of Responsibility Investigation Committee, and we would. The scope is all the director and executive officer of present and the past, and including Nagamori. What to do with our finding is not yet decided. Thank you. One more question. This is a bit outside my specialty. I hope I'm not asking a question completely off the tangent. This press conference started at 8:00 P.M. It's already close to 10:00 P.M. Why didn't you decide to start this press conference earlier? It's quite a difficult time for even the media to cover. Why did you choose this late evening to hold this press conference? You have a point. I would like to thank you for gathering us this such a late time of the day. The timing of disclosing this committee's report and I wanted to, we wanted to have the press conference soon after that at this kind of official venues to make sure I address to all of your concerning point in the Q&A sessions. We wanted to piggyback one after the other, first from a third-party committee report, then our own press release. I apologize for having you attend to our press conference until very late evening. Thank you very much for your explanation and presentation. I am Takasago from Electronic Device Industry Newspaper. I have a question from a different angle. Your order taking manufacturing is on track according to your forecast and plan. Okay, business is proceeding as usual. Regarding CapEx plan for the future, I believe you are planning to spend ¥ 140 billion. Majority of that is for India. Currently, I think for your plan, you are trying to build six new plant in India. Out of that, I believe 4 plants are already in construction. This ¥ 140 billion of CapEx budget, is this something that you are progressing as planned, or perhaps you are postponing or suspending some of those CapEx plan? That's my first question, please. Thank you very much for a very important question about our business. Regarding the CapEx budget of $140 billion, because of the current circumstance, what is most important for us is secure our cash on hand. Right after Nidec stocks being designated as a Security on Special Alert, we have a strict scrutiny of every single investment. This year we will not be able to exercise our entire $140 billion on CapEx and budget. Within the India's CapEx, four plants plus two more. Those are AMEC business plants, for India market and also a compressor plant, for white goods. Those constructions or studies or land surveys are conducting as planned. Demand in the India market is progressing as we have forecasted, and we are carrying out the investment to India market as planned. You mentioned that, in order to secure the cash, you will spend less than ¥ 140 billion in CapEx. Of course, you haven't closed the year, so it's quite difficult perhaps for you to disclose the details. To what extent do you spend this CapEx? It's not that we have revised the plan for the entire budget for the CapEx. We haven't suspended any of the major CapEx project. We are trying to control the spend. We would prioritizing the spend as well. And, um- The other question is related to the automotive business, because if I recall correctly, in China, magnet of E-Axle will be launched in China in 2028. Before that, in 2027, 7-in-1 will be launched. There were such specific plans presented that the exhibitions and so on. For example, the magnet-free component in 2028. All of these automotive related plans will go on as planned or are there any changes in those plans? Let me explain the current status for the development. 7-in-1 has already been launched, meaning that it's already available on the market. The next item, magnet-free item, this has a really hard hurdle. That's why including our research institutes, all of the research activities has gone well. Thank you very much for your question. Thank you. The other point regarding the financial statements, when the next statement will be issued? According to your explanation regarding the quarter three, based on today's press release, that's all, and then we have to wait for the shareholders' meeting slated for June, and then I'll be able to see more information related to the financial statements. Is this understanding correct? Now, I'd like to ask Mr. Nakagawa to respond to that. Thank you very much for your question. Regarding the third quarter, it's estimate, not the finalized financial statements. Therefore, we'd like to share the revenue and the profit at the third quarter flash report. Therefore, please wait till the end of March because now we will close our books. Usually toward the announcement in June, we prepare for the official financial statements. We'd like to follow this timeline. Thank you very much. It's already passing 10:00 AM in the morning and therefore, we'd like to take this question as the last question for today's press release conference. On the right-hand side, the person in the front row, please. Thank you very much. I'm Higashi from Kyodo News. Those who resigned, including those people, how you take the legal responsibilities? Are they the criminal responsibilities or civil responsibility? If you don't mind, I, Iminagi, would like to respond to this question. Yes. We have to consider all the possibilities. Including criminal procedures, yes. The criminal cases should be considered. Next question is related to the impairment loss, because you mentioned that amount to be around ¥ 250 billion, is it possible that an impairment loss will be zero? Regarding ¥ 250 billion, this amount, if I strictly answer to this question, this is the amount subjected to the impairment loss. Therefore, yes, it can be zero. However, once again, as we explained, we needed to go through duly processes to finalize the exact amount for the impairment loss. Thank you very much. How about you, the person in the back? Thank you very much. I'm Koganezaki from Monthly FACTA Magazine. My question goes to President Kishida because I'd like to know the relationships between Nidec and the accounting firm. According to the report by the third-party investigation committee, the explanation shared with the accounting firm was different from the fact and inconvenient truth was not shared with the accounting firms, according to the report. This may be the problems on their side. On the other hand, regarding with the accounting misconduct count is more than 1,000 as found in this investigation. In addition to that amount is also huge. Therefore, I believe there must be the problems on the side of accounting firm because now they didn't do what they had to do as the accounting firm. I assume your accounting firm is PwC Kyoto. Actually, this PwC Kyoto was working for the KDDI, where the misconducts were identified. However, right now it's become PwC Kyoto, and that's why they can work for you as accounting firm. Now, I'd like to ask your evaluation or assessment of PwC Kyoto. In addition to that, this problem or the scale of the issue is so huge and therefore you may want to consider to change your accounting firm. If so, can you please share your plans? Thank you very much for your question. First of all, regarding the assessment of our accounting firm, we are not in the position to do that, and therefore, please refrain from making any comments for that. For us, all the time through accounting firm, we have to face the market because we have to disseminate the correct information over the time. This is a very basic point, that's why we have to go back to this, the starting point to review our positions and the way we work. In addition to that, whether or not we would like to change the accounting firm from PwC Kyoto, no intention of such. Thank you very much. Regarding with the report issued by the third-party investigation committee, it stated the very aggressive comments by Mr. Nagamori. For example, he said that everyone was not motivated at all, and I'd like all of them to resign the company. It's really out of the day. That's why the Mr. Nagamori's business style was criticized as the power harassment. Now, when you, Mr. Kishida, looked at the comments and the statements of Mr. Nagamori and his business style, do you think it's a power harassment? President Kishida, did you have such experiences regarding the harassment? Probably it may be regarded as the harassment when I look at his actions and behaviors and statements described in the report. They may be regarded as harassment. I saw some examples in the report. It's not the investigation for the harassments and therefore, please bear with me. How about you, yourself? Me, including myself, email correspondences described in the third-party committee reports, I understood that there were such correspondences via email. Thank you very much. The person wearing the tie over there. I'm Kanie from Yomiuri Newspapers. Let me make a follow-up question. In the improvement report issued, in generally, it's not done by only one person, but due to the corporate culture, these three z-book problems were caused. The most important person who has to have ultimate responsibility is Mr. Nagamori. President Kishida, when he was in Nidec, you may frequently see such behaviors and statements. Back then, did you say that Mr. Nagamori, "You have done too much," or the, "What you have done or said is out of the time." Did you make such comment to Mr. Nagamori? Thank you very much for your question. I myself said in the previous similar conferences, regardless of the cause of the pressure, how the person perceives those statements and behaviors, it's very important because no matter how strong the pressure would be, how the person should perceive it, because that person should be able to change it for the positive way. Whether we can do that or not, that is a very important basic point. Therefore, we'd like to incorporate it in our improvement plan. Then we can execute it. Actually, as you saw, whether I myself was exposed to the pressures, including harassments in daily businesses, I myself did not have such experiences. When I look at the history, long history of the company, I now recognize that another situations have happened, and I found it by reading the reports. Going away from Mr. Nagamori's influence regarding this point, internally and externally, there are organizations, institutions that has the name of Mr. Nagamori. For example, foundation would be totally irrelevant to the businesses. However, there are name included in the title of the organizations and institutions. Therefore, in this sense, you cannot eliminate the image of Mr. Nagamori. Of course, not you alone, Nidec alone cannot do anything. However, what to do with those names containing Mr. Nagamori, for example, Nagamori Gallery, Nagamori Institute, do you consider the change of the names of those institutions and organizations? I'd like to ask Mr. Iminagi to respond to that. Thank you very much for your question. Honestly, we have to consider them from now on. Doing right, that should be the corporate culture we have to pursue. Under this spirit, we need to identify what way we have to do, and including all of the relevant people in the company, we'd like to determine what to do for those organizations and institutions. Thank you very much. T his will be the last question. The person in the back. I'm Matsuoka from TV Asahi. I'd like to ask a question to Mr. Kishida, because this time report said that Mr. Nagamori's engagement was so huge, although he has already resigned the company. Mr. Nagamori and then Mr. Komori are not here because of the company decision, I assume. Do you think that is the right decision as a company? How about you, Mr. Kishida? Thank you very much for your question. Actually, I had to reflect this. I said this in the similar occasions over and over again. Starting in the April of 2024, I have assumed the position of CEO and the presidency. What happens at Nidec, I have to explain it as the CEO representing the company. With regard to Mr. Nagamori, he's totally irrelevant to the company. Based on the result of the third-party investigation committee, what the company is going to do, that is the main objective for this press conference. That's why I have to stand up to explain it. What you said or what you recognize is correct. Thank you very much. Last question. Mr. Nagamori has resigned as the Chairperson Emeritus with a statement. This statement includes his dreams and hopes for the future. The scandal happened, and because of this big dreams and so on, these statements do not reflect the regret. Do you think that it would be risky and dangerous for the company, Nidec? Thank you very much for your point once again. As the Chairperson Emeritus, this is the last message from Mr. Nagamori, and that's how our company has perceived, and that's why we have disclosed his statement externally. That means that there's no modification, amendment. After receiving his message, we perceive that that is the last message from Mr. Nagamori in the capacity of the Chairperson Emeritus, and that's why we have shared that in a statement. Thank you very much. With this, we'd like to conclude today's press conference, despite of it's very late at night. Thank you very much for your participation and attention. Thank you very much.