Nidec Corporation (6594) Earnings Call Transcript & Summary

Now the press conference by the Investigation Committee will start with its own moderator. I will excuse myself. Thank you.

Good afternoon. We would like to start the press conference by the Investigation Committee. My name is [ Sugiye Atoni ]. Thank you very much. The 3 presenters of our press conference are as follows. Please welcome them. And these are our presenters today. Chairperson, Mr. Toshihiko Itami. The next person, a member of the committee, Mr. Kenji Kawai [ Anatani ]. And here is an assistant of the Investigation Committee, Mr. [ Yunese Atani ]. They would like to remain seated during the rest of the press conference. First, we would like to have the Chairperson explain the overview of the presentation. And after that, we'd like to have a question-and-answer session. Itami-san, please start your presentation.

I'm the Itami [ Anatani ], I serve as the Chairperson of this committee. Thank you very much. Nice to meet you. And has been -- I believe you have already received a copy of the investigation report issued by us. And you can see the digested version of the document, as well as we have -- we would like to use the PowerPoint material for our presentation. I would like to put up each page of the presentation material as we present our information. And please make sure to check this information for your reference. Now I would like to sit down as I give you my presentation. Thank you. First, I'd like to give you the background and the structure of the investigation. Please take a look at the first page of this presentation material. Nidec Corporation established a third-party committee on September 3, 2025, following the emergence of suspicions regarding improper accounting practices at Nidec and its group companies. In parallel, Nidec established the Nidec Corporate Reform Committee on October 30, 2025, with the aim of restoring trust and strengthening its internal control system. And beginning January 8, 2026, the company commenced an internal investigation, so-called the comprehensive quality inspections covering the production and development sites of the Nidec Group. During the course of a comprehensive quality review, suspicions of inappropriate conduct related to quality and inappropriate conduct related to product, country of origin labeling, among others, were identified at multiple locations of the Nidec Group. Accordingly, Nidec determined that an objective investigation by external experts was necessary, and at the Board of Directors meeting held on May 13, 2026, established an investigative committee composed of external experts. The committee conducted its investigation from the date through September 2, 2026. Next, regarding the purpose and scope of the investigation. Please take a look at the first page of the summary version of the document. The purposes of the committee's investigations were: to clarify the facts concerning suspicions of inappropriate quality related to conduct and other matters; second, to analyze the causes and recommend improvement measures; and third, to address matters that the committee deemed necessary. In the investigation report, inappropriate quality related to conduct refers, for example, to violation of application and approval procedures for customers, so-called [ climate changes ], violations related to customer use, failure to conduct tests and inspections, falsification or fabrication of test or inspection records and similar acts. In addition, in our proper conduct concerning country of origin labeling refers, for example, to displaying or stating a country of origin different from the actual country origin of a product, declaring false information or failing to make a declaration when importing or exporting and stating false information or failing to state required information in customers' documents and similar documents. Next, regarding the selection of subjects for the investigation, please take a look at the second page of the summary version of the document. In this investigation, in selecting the subjects of the survey, we first identified and selected candidate cases to be surveyed, and second, conducted supplementary research, and third, selected the subjects of the survey. After that, subjects and the merits of the survey were determined through the procedure of number four, deciding the entity responsible for the survey and the depth of the survey. Next, I would like to explain identification of candidate cases to be surveyed. First, our committee designated as candidate cases for investigation: a, matters reported by each BU or site through activities such as comprehensive review hearing during the comprehensive survey; b, matters among reports submitted to the quality suggestion box, for which our committee took over the investigation from Nidec; c, matters among reports submitted to the internal [indiscernible] channel for which our committee took over the investigation because of suspected inappropriate quality-related conduct; and d, matters identified through visits to key sites conducted by Nidec's Global Quality Management Division or GQM. The committee made the remaining matters, excluding: a, matters identified through the processes described above and the like that were limited to violations or deviations from the internal standards and the like with no violation of customer agreements or the like or laws, regulations, certifications or the like being found; b, among matters involving violations of foreign changes, those in which the customer was subsequently informed of the details of the relevant change and consent to the changes that was obtained from the customer; and c, matters that although involving different products or customers, were carried out at the same BU and site in the same or substantially the same manner as another matter were, therefore, consolidated and organized under the matter, the subjects of the investigation. Cases that were found after the commencement of investigation to fall under any of these categories were also excluded from the scope of the investigation. Next, regarding the conducting a supplementary investigation. Next, our committee conducted a questionnaire survey, an AI [ avatar ] survey and a forensics investigation because there was a risk that the investigation subjects selected through the process just explained lack of comprehensiveness to broadly identify case that have not been identified and to confirm, among other things, that there were any discrepancies between the information provided by the BU business locations, the clearance and other actual situation. The questionnaire survey was conducted among all of the 97,663 officers and employees belonging to 305 production development sites, and responses were received from 89,973 individuals, a response rate of 92.1%. Of these, responses reporting specific quality misconducts were carefully reviewed for their content and severity, and cases deemed to require investigations were added to the scope of investigation. A total of 12 cases and composed 7 major quality cases and 5 general quality cases were identified through the questionnaire surveys. In addition, the AI avatar survey displayed on the dedicated system instead of a human interviewer presented questionnaire concerning awareness of quality misconduct and other matters, the actual state of quality management, organizational culture and so forth. And the participants responded by voice or by text input. The survey was conducted at 16 locations. And as a result, 2 cases involving suspected new quality misconduct were identified and added to the scope of the investigation. The forensics investigation reviewed data concerning 31 current and former officers and other executives of Nidec with the primary objective of determining whether Nidec's officers or vice presidents had instructed or be involved in inappropriate quality-related conduct or similar matters. As a result, no cases involving suspicions of new inappropriate quality-related conduct were identified, nor was it confirmed that any officers or other executives had instructed or possibly approved specific inappropriate quality-related conduct. Next, I'd like to explain the investigation methods and classification of the cases. Please take a look at Pages 3 through 4 of the summary version. For the cases in which inappropriate quality-related conduct was identified through the investigation just described, the committee further classified them as either material quality cases or general quality cases and determined that the entity responsible for the investigation and the depth of the investigation. The following cases were classified as significant quality cases: one, cases involving organizational involvement, involvement by an officer or site manager of Nidec Group; two, cases in which the final product is intended for an overseas public institution; three, cases involving suspected violation of laws, regulations, authentication, authentication and all the like; four, cases assessed by the reporter or others as having the possibility of a recall for the product in question; and five, cases assessed as having a high technical risk, risks affecting safety related to the product in question. All the other cases were classified as general quality cases. Furthermore, for cases deemed highly likely to fall under the improvement quality standards, this committee took the lead in scrutinizing objective documentation and conducting interviews with the relevant parties, as well as visiting sites as necessary to inspect the workplaces and verify records, among other activities. For general quality cases, Nidec investigated the facts based on this committee's instructions. And the committee reviewed and investigation results and related the documents requesting the submission of additional material factual verification or supplementary investigations as necessary. Next, I would like to give you an overview, overall picture of the investigation results. Please see Pages 5 through 6 of the summary version of the document. A total of 844 instances of inappropriate quality-related conduct were identified in this investigation, including 60 important quality cases and 784 general quality cases. For specific distribution by BU, we have Nidec Insurance at the top, 585 cases; Nidec Mobility Corporation, 125 cases; Nidec Techno Motor Corporation, 57 cases, among others. And please take a look at this chart for more details. For abbreviation of each company, please refer to Page 5 of the summary version. By type of conduct, there were 805 violations involving [indiscernible] changes made without prior notification or due approval from customers, accounting for approximately 95.4% of the total. In addition, there were 22 cases, 2.6% of qualification, fabrication of test and inspection results and 11 cases or 1.3% of violation of inspection of manufacturing conditions, while remaining category accounted for 6 cases. The number of cases by BU was concentrated in the 3 BUs of Nidec Instruments, Nidec Mobility and Nidec Techno Motor, which together accounted for approximately 90.9% of the total. Furthermore, regarding the 844 cases of the inappropriate quality [indiscernible], the company explained on May 13 that it had confirmed suspicions of more than 1,000 cases of inappropriate quality-related issues. This figure of over 1,000 cases understood to refer to the number of suspected improper acts counted by the company prior to the commencement of this committee's investigation based on the number of reports received from its offices and at the time. On the other hand, the committee's figure of 844 cases includes matters newly identified after May 13 and was calculated based on the number of the cases determined to constitute improper acts after screening the matters subject to investigations, including elimination of the duplicates and the figures, therefore, are defined because of the premise for calculating the number of cases are defined. Next, well, this is an overview of the result of the investigation into the important quality matters. Please take a look at Page 5 of the summary report. In general quality cases, [ foreign ] changes accounted for 95.4%. However, in the distribution of 60 critical quality cases by type of conduct violations involving changes accounted for 28 cases, qualifications of fabrication of the test and inspection result for 22 cases, inspection and manufacturing conditions for 5 cases and other contracts for 5 cases. The concentration of [ vibration ] involving [ foreign ] changes is lower than in the overall distributions. So the [indiscernible] of the [indiscernible], Nidec's instruments and small products business units and the automotive existing business units accounted for 38 cases. About [ 16 cases ], we already explained earlier. So we have some suspect. Please note that the example of critical quality of cases involving our inappropriate quality practice included on Page 6 of summary version and Page 67 to 77 of the published versions. And about the safety issues that I understand the company will investigate in relation to the relationship with the customers. About safety, the product with the safety issues and the product with the reps are not identified. This is what we heard from the company. Next, well, this is an overview of the investigation result concerning representative example in inappropriate quality related conduct. Please take a look at Page 6 of the updated version. Example include a case in the small motor business unit, in which shipment inspection data for [ fresh ] products for IT equipment was [indiscernible] different from the actual measured values and the case in the automotive existing business unit in which the work was performed by using some nonconforming parts without obtaining the customers' approval. For other cases, please take a look at the Pages 67 to 77 of the [ first version ]. Next, I'd like to talk about the concerns and the method of the investigation into inappropriate conduct related to the indication, the production origin and other matters. Please take a look at Page 67 of the version of the summary report. The subject investigation were cases suspected involving inappropriate quality related conduct identified through the Nidec quality inspection and other means and cases suspected of the involving inappropriate conduct concerning indication of origin and other matters. As a result, the -- so the 6 cases were the firm involved in appropriate conduct concerning indication of origin and other matters. Of these, in 2 cases, this committee subsequently verified the result of the existing investigation conducted by the external law firms to confirm there were no unreasonable aspects. Furthermore, the 3 of these cases were matters for which the investigation by external law firms has not been completed. So this committee took the lead in investigating them through the [ matures ], including detailed examination of the objective materials, interviews with the relevant persons and review of the e-mail data. The remaining case was newly identified through the questionnaire surveys and other means. Next, I'd like to talk about the overview of the result of the investigation into inappropriate practices, such as improper indication of the place of origin. Please take a look at Page 67 of the summary version of the report. So representatives the examples listed here at the Nidec Technology Corporation. There was a case in which machine parts had undergone [ process overseas labor ] Japan on the [ place ] and also the automotive motor electronic control business. There was also a case in which even after some processes had been transferred to another country. The determination of the place of the origin was not reviewed, and the supplier certificate stating the product originated in Japan were submitted. Please take a look at Page 78 of the published version. Next is a summary that is the structure analysis. So that structure analysis was conducted. So we will -- we have looked into the reasons why an [ analysis ] state was formed [ became main trained ]. And please take a look at Page 7 to 11 of the report. The inappropriate quality related practices and other issues identified in this investigation varied widely in their forms and other aspects. The causes are not uniform either. Companies must analyze and address the risks of fraud and inappropriate conduct as risks to the system as a whole. [indiscernible] organization system and processes are intertwined. Accordingly, this committee evaluate the condition of an organization that influence the judgments and actions of its officers and employees allow inappropriate treatment to occur and continue as an unhealthy condition. Based on this view, it analyzes the manner of the business operations, other factors that led to the formation and infringement of such conditions and structural problems. So in this case, the unhealthy condition identified with respect to the management situation in which the unreasonable and [indiscernible] nature of the top-down target has been postponed the views at the site without ensuring transparency to asserting the actual conditions of the business and our front line. At the corporate level, the functions for the monitoring and the like were not operating adequately as the actual circumstances of order acceptance, manufacturing and quality assurance at the HBU and site were not sufficiently understood. And the BU and site levels, under pressure to achieve performance targets and reduce costs, comply with the appointed way of delivery and maintain supply continuity. Compliance with the customer agreements, the applicable laws and authentication requirements as well as parts of the quality assurance processes were subordinated to the demand to achieve performance targets. The formation and entrenchment of this unhealthy situation resulted, for example, from the structural problems at the management level, such as a failure to establish an organizational structure commensurate with the group's rapid expansion. For structural issues concerning the other matters, please take a look at the Page 7 to 11 of the summary report. And also please take a look at Page 79 to 120 of the coverage version of the report. So now I'd like to talk about the concerns and transformation from an unhealthy state to the desired state and measures for the improvement. Please take a look at the Page 11 to 19 for the summary report. To realize the state of each layer, it is necessary to implement in parallel with mutual alignment soft measures that influence the values, judgments and actions of officers and employees and hard measures that develop management and control, organizational structure, the authority and procedure, information infrastructure and modeling and auditing. The desire [indiscernible] of the Nidec management is to approach this not only short-term early perspectives, but also midterm to long-term horizon, to define the organization's form and the direction it should pursue, share the important values, including an attitude to quality and continuously engage in organizational learning and emphasize making high-quality decisions as a team rather than as individuals. Therefore, the more so that the desired state to which Nidec's corporate function is to support the business divisions proactively and across organizational boundaries toward achieving total optimization while sharing goals and other objectives with management. The desired state at the BU and site level is one in which all officers and employees of the business division share the principle while continuing to take sound challenges toward achieving ambitious goals. To realize this desired state, it is necessary to implement measures in both the soft and hard aspect. For details, please refer to the page of -- Page 11 to 19 of the summary version of the report. With this, I'd like to just complete the explanation about the investigation report. So I'd like to give my own perspective. So as a result of this investigation, the group said that in multiple BU and sites, there are several types of the inappropriate quality instances were found, and some of them continued for some time. So they are very involved in the operations, and they have been repeated. They have been operated in [indiscernible], in addition to the inappropriate accounting. Well, this quality is related with the core of the manufacturing operations. This level of inappropriate quality control [indiscernible] program. So -- well, the company should take this investigation result seriously. And I hope that the company is going to refer to the proposed improvement. I hope they are going to take the serious read into the improvement of the operations. This is the end of my presentation. Thank you. So from now on, we'd like to entertain your questions.

[Operator Instructions] Second from the right-hand side.

My name is [ Hiroko ] from Nikkei Newspaper. So at multiple sites, the number of the inappropriate quality issues have been found. Well, did you find out when those instances happened? Back in 2012, so I found some instances. But even before that, did you find any inappropriate quality issues?

Yes, I'd like to answer your questions. So that in the report, ever since 2012, yes. So inappropriate committee issues, we pick up those. But we don't have any objectives to pick up how many numbers of the quality issues. So as you mentioned that the -- well, we don't know whether any quality issues were found prior to this year, 2012. At this moment, we have [ the well confirms ] that at least ever since 2012, we have evidence of inappropriate quality issues.

This is my second question. Regarding important quality issues such as violation of laws and regulations or violation of safety standards, those are taken as criteria. In the investigation committee, you refrained from certifying as such. But of the 50, how many raised suspicions of violations of laws and regulations to -- if you could answer that question to the extent possible, that would be appreciated.

Well, I think this is related to Slide 4. So for the purpose of efficient investigation, we came up with certain criteria. And you were asking about the breakdown of the number for each categories. It is not our position to certify, recall or safety or evaluation. So in that sense, even though you asked the question, the suspicions of violations, since we did not certify or recognize any violations, we are unable to give you the number of cases of violation. For your information, the material quality cases overlap or go over several criteria. Thank you very much. We will take the next question. Please raise your hand if you have any questions. To your left, second from the front wearing polo shirt.

This is [ Mori ] from [ Toyo Kai ]. So 60 material quality cases and general quality issues. Could you indicate how many customers were affected?

Thank you for your question. So the scope of the investigation from our perspective is whether certain quality cases would fall under material quality cases or general quality cases. And it was not a direct scope of the investigation as to which clients or which customers are affected.

The suspicions of violations of laws and regulations, it's mentioned on the slide, but what laws and regulations in particular and what certifications and et cetera, the word et cetera, is used, but what is meant by that exactly?

Thank you very much. So regarding laws and regulations, sorry to generalize, but as a result of the inspection and if the data is altered and if it is recorded on the sheet and is submitted to the customer, supposing that this happened, then depending on the -- on what was exactly done, it could be a violation of unfair competition law. In the investigation regarding quality misconduct, I am aware that there are such cases in the past. And as for certification, that has to do with overseas certification. And what about the term, et cetera, or others? Including modern regulations and certifications, certifications vary in nature. So we use the term et cetera as an inclusive term. So by modern regulations, you meant violation of unfair competition act. I decided as an example.

Next question, please. If you have any questions, please raise your hand. So to your right, the one sitting in the third row wearing light blue shirt.

This is [ Skaupa ] of Nikkei [ Cross ]. So in the end, who should be held responsible? Who is to be blamed the most? Could you tell us that? Because in the forensic investigation, officers did not make specific instructions that's mentioned on this report. So reading that, those on the ground engaged in misconduct, or that's how this can be interpreted. So is -- do you have any thoughts on that aspect?

Thank you for your question. So regarding this matter, who should take responsibility, I think that was the gist of your question. So on that point, Mr. Kawai, a member of the Investigation Committee, will offer the answer.

This is Kawai speaking. Let me answer that question. There are differences across different BUs and sites. So I cannot make any generalized statement. However, looking at several sites across the board, the rapid expansion of the company together with that, the quality control structure should have been established, but there was a delay in putting such a structure in place. And there is strong pressure for -- from the top management to achieve certain targeted goals. So in that sense, there was distortion in the management policies. But the cause was -- whether the cause was only attributable to the management -- top management layer or not, it's mentioned in the analysis, but the management layer, BU and site layer, corporate layer, each had its own issues. So regarding Nidec or Nidec's issue, there are structural issues. So that is the crux of the matter for this issue. So by structural issue, it turns out that no one will be held responsible for or will be held accountable for. Well, we are not in a position to determine the responsibility, but each layer, the management layer, corporate layer, BU and site layer, there are issues associated with each layer. So the managers, supervisors had experience and excelled in their work. And that is why they became managers. And those managers would have stayed with the company over a long period of time. So what was done on the ground, the fact that the misconduct was done, they must have been aware. And when they became managers or officers, I wonder if there was no trace of them giving instructions or giving specific instructions. As far as we confirmed, that is not the case.

So let me ask another question. Rather than who should be held responsible for within the company, what process did not work well, resulting in this kind of issue or this misconduct took place? Where was the problem in the process?

Let me answer that question. I am repeating myself, but at the management level, management layer, the corporate layer and BU and sites, there are detailed description in the detailed report. There were interlinkages across those layers that resulted in these issues.

We'll take the next question. Please raise your hand if you have any questions. To your left, second row from -- and wearing a navy jacket, wearing glasses.

My name is [ Kanai ] from [ Yomiuri Simon ]. Thank you very much. So in the report, there was micro management, the expression of micro management by Mr. Nagamori or Chairman Nagamori was used several times. So micro management in general means exerting pressure, managing down to the detail. But in the investigation, what kind of conduct was seen? For instance, would Mr. Nagamori and others go to the plant and demand certain actions? What actions were taken?

So Mr. Nagamori's way of thinking and the pressure and achieving of the target in the accounting report, there was a description of what Nagamori -- Mr. Nagamori's thinking. And there's a mention of the relationship with the pressure on the target on Page 83. If you could look at that, Mr. Nagamori's thinking and what was missing or was insufficient that is pointed out on that page.

And against such thinking, was there anything that was found in terms of actual actions or conduct behavior?

So against high target or the fact that high levels of targets were set, that was recognized in the report. So something that was not in line with the actual state of business, the profit targets, the short-term targets were set or cost reduction targets were demanded and continue to demand such cost reductions. That was mentioned in the report.

Related to that, you mentioned the accounting report, and there were some parts that are quoted from the accounting-related report. So once again, perhaps the root causes are the same for the quality issue and the accounting issue. So those on the ground in financial and accounting department and those on the ground for manufacturing, do you have any opinions about the relationship between the two?

Let me answer that question first, and perhaps Mr. Kawai can add his thoughts. So in terms of profit target that was not in line with the actual state of business and short-term goal and also demanding cost reduction, there is a similar issue that is also related to accounting issue. But the accounting fraud and the quality issue, they should not be seen as exactly the same. The quality -- inappropriate conduct regarding quality, there are certain intrinsic issues related to quality there. For instance, the sufficient independence of quality assurance division is one reason. So it is similar, but there are certain specific aspects that are related to quality-related issues. So Mr. Kawai can add a few more comments.

This is Kawai. Let me offer some additional comments. As the Chairperson just mentioned, there are similar rules just as with the accounting fraud issues as we recognized. But as for inappropriate conduct regarding quality, it's not limited to that. At each BU and site, they have their own issues. As the Chairperson mentioned earlier, the quality assurance department independence was insufficient. In addition to that, at the time of technical verification before going into mass production, that was insufficient. Also within the BU, the sharing of the responsibility or procedures were insufficient. And in terms of controlling or managing the transfer of production, that was insufficient as well. And as for quality, compliance and risk assessment, monitoring insufficiencies at different level, the management level, corporate layer, BU layer, each layer had its own issues. And that resulted in this particular issue as we understand.

We will move on to the next question. Please raise your hand if you have any questions. The person on the front close to the entrance/exit, the person in the blue.

This is [ Hawai ] of [ Diamond ] Corporation. Thank you very much for your presentation today. First of all, here's my first question. If you take a look at the report in the middle of it, says Mr. Nagamori and other executive management team have these instructions, et cetera, and no such case was found, according to the report. I would like to ask you some additional questions on that point. With respect to Mr. Nagamori-san, Mr. Nagamori and the executive management team, how many people or who actually are included in this, Executive Vice President or Senior Vice President? Or who are actually included in the executive management team? Can you specify any specific individuals? And within that executive management team, did you conduct any hearing or interviews with these -- any of these individuals? As far as I can see from the report, you did not seem to have any one-on-one interview with Mr. Nagamori himself. If that's the case, why? Was it not really necessary to interview Mr. Nagamori? Can you provide me with the answer with those -- regarding those questions?

I believe you're referring to the result of the forensics. With respect to the executive management team, 31 people are the people included in this term, executive management team. That includes Mr. Nagamori himself. The current President and the current executive members are included in the 31 people. With respect to Mr. Nagamori, you said that you -- we didn't seem to have an interview with the person. We did have an interview with Mr. Nagamori. Please take a look at Page 83 of the document for the result of the contents of the interview with Mr. Nagamori. With respect to the interviews and researches into executive management team members, the members of our committee had interviews with these executive members as deemed necessary, and we launched necessary investigation regarding these individuals as necessary.

With respect to interviews with Mr. Nagamori, when it comes to his possible involvement in the quality practices, problematic practices, how many times did you interview Mr. Nagamori regarding the possible suspicious quality misconduct practices? And how did you come to the conclusion that Mr. Nagamori was not directly involved in those quality-related issues?

Thank you very much for your question. With respect to Mr. Nagamori, please take a look at Page 83 of our document. This is the result of our investigation regarding Mr. Nagamori, we have had one interview with Mr. Nagamori. In this interview, Mr. Nagamori stated that as the company grew larger and larger, it became -- we were unable to provide enough number of resources, human resources regarding the pace of the growth of the company. Please take a look at Page 83 of the document once again.

Here's my second question. With respect to Mr. Nagamori and the members of the executive management's possible involvement as well as instructions from these people, do you have any -- please -- you didn't seem to -- please tell us the difference between -- you didn't find any evidence, or there was no -- and there was no involvement. And there are some interesting descriptions over here. And as far as these descriptions are concerned, they may look as if they -- the executive management team members were actually involved in those quality instance, possible instance.

Thank you very much for your question. The meaning of the involvement is in question here. As I understand, specific illegal instructions or illegal acts were not really found in our investigation. No -- so could I possibly understand that there was no such instance found? As far as our investigation is concerned, we couldn't find -- identify any involvement. It could be either 0 or 100. We don't use such clear expressions. As far as our investigation is concerned, we couldn't -- we didn't find any involvement of such activities.

[Operator Instructions] Thank you. Let me check once again.

If the targets were made by the executive management, couldn't that mean that the executive management teams were involved in those quality-related issues?

As far as performance management is concerned, there was a very strong pressure. That is for sure, as you can see on our report, that type of pressure is something we recognize.

Next question. [Operator Instructions] Please go to the person right next to the previous speaker, the person we have in glasses.

This is [ Sei ] of [ Asihimbo ] newspaper. Itami-san, you're the Chairperson of the committee. And at the end of your explanation, you talked about -- there was a repetition of some appropriate -- possibly inappropriate practices. And in the investigation report, it says the misconducts were transferred from one place to another as time went by. Could it possibly appropriate to understand that there was a systematic misconduct? You didn't confirm any involvement instructions of executive management team members as a fact. But still, at individual business basis, there were some inappropriate activities taking place. Is that the correct understanding?

There was no top-down instructions. I believe that is the primary part of your question. Kawai-san, please answer the question.

This is Kawai speaking. Let me answer the question. As has been explained by Mr. Itami already, we do not confirm any involvement or instruction coming from the top management about these inappropriate practices. But at individual BUs or business units, some BUs, there were some inappropriate practices. Please take a look at Section 5 of the investigation report. Here, if you take a look at the one, there are some examples of inappropriate practices. So SPMS business unit over here. If you go to the next slide, you can see the details of the information there at the group companies, presidents, factory managers and R&D leaders of corrected revised data in our report. With respect to such cases, at group company level, we believe inevitable that we have to say that there were some systematic involvement in those issues at individual basis.

These instances account for almost all the cases described in your report?

As far as we could confirm, group companies' executives as well as other executives, including the one that I've explained, there was a total of 20 cases involving those group company executives.

You have 844 cases in total. And only in 20 cases, top executives are involved in those cases, those acts. With respect to the 844 cases, many of them are general cases, quality-related cases. With respect to material quality-related cases, the number is not so large. So you only have only 20 cases, and you have the remaining number of cases. Those cases were incurred because of the pressure from the top management, is that personnel type issues? It's not just the top personnel-related personnel issues caused by individuals. There are 20 cases that involve the top management of group companies and other businesses. How about the GMs and section managers? I believe if they are involved in the cases, there will be systematic cases. If you involve -- if you include these people, would it be correct to understand?

It's all really depend on how to define the systematic as a word. We're not going -- we didn't go into that detail in our report. That is all from me.

Next question, please. From your right, second from the right, the person wearing a white shirt.

This is [ Nomoto ] of [ Nikon ] newspaper. With respect to the inappropriate practices, we have numbers by BU. The numbers vary from BU to BU. Nidec Instrument seems to be occupying a large portion of the total number of such cases. And everybody was very urgently trying to desperately reduce cost, I believe. Under such a circumstance, why do you think we have so much -- so much difference among these BUs? I believe some BUs were very clean, free of such conducts. How do you take a look at this fact, data results?

Please go to Slide #5. I believe that answers -- best answers your question. And there are quite a few differences, as you said, with respect to the number of these cases by BU. Mr. [ Yuasa ] will provide you with additional information and answer.

I'm a member of -- I was a member of the Secretariat. This is [ Yuasa ] speaking. With respect to numbers by BU, the scale of the businesses, the number of products, number of customers all affect these final numbers here. Just because we have a large number for one of the companies does not necessarily mean it's not inappropriate. It does not necessarily mean that the particular deal is to blame. With respect to Nidec Instruments, they have a large number, 585 cases in total. There are quite a few form changes that occupies a large majority of their cases. And quite a few products and components are handled by -- produced by this company. So they have to go through so many form of changes. So in other words, there are some concentration with practices where they have so many products come to them for changes, the change controls. So if they have more products, more clients subject to the change control, we have seen that the valuation of changes.

Okay. I think in relation to my first question, second question is about the changes. Many of the practices are related with for changes. So that your clients, to where you supply to, perhaps you have a kind of misconduct. And that you have [indiscernible] against your clients. Therefore, what is the reason why we have so many changes, misconduct about the changes?

Yes. [indiscernible] changes, there are different other types of the changes as you go through the well stream learnings, there are more cases for the change control to the [indiscernible]. That is one of the reasons why.

I would like to go to the next question. [Operator Instructions] Yes, right from the top.

My name is [indiscernible] from [ Sonoma One ]. This is the evidence you got. Is my understanding correct?

Thank you for your questions. The reason why [indiscernible] is that -- well, we identified a practice in 2012, but we didn't have any investigation prior to this year. That is why we cannot give you the correct -- a different answer.

844 cases. Out of those, the oldest one was conducted in 2012. Am I right?

Yes.

I have another question. So about the contents of the practices for the quality issues, earlier, you mentioned, so for example, inspection result falsification is against the law of the unfair trade to avoid the falsification of the test data. So in other words, that they lose the trust to the other customers?

This is just a general -- well, explanations about the quality issues. So in the past, there were some quality issues which had violations of the fair trade uniform so that -- well, for example, for ligation. So for example, [indiscernible], so for example, that you change the numbers, which is not correct. And if you just face such a way, if you submit such a way to the clients, you may lose that credit. So this is not allowed because of the regulations and low. That is why, in some cases, we can say there were some breaks at a variation of the other regulations. Unfair that the Competition Act.

[indiscernible] about the certifications. So what is the certification are you talking about?

So therefore our certifications. So these all means that Mr. Yuasa is going to answer questions.

Income certifications that quality management, we have some certification protocol the quality control, but the actual IRD certifications. We didn't have any assessment that any other practices against this kind of the certification note.

Okay. I'd like to go on to the next question. Please raise your hand if you have any questions. So the person riding hand.

My name is [indiscernible] from the Monthly Fact. I'd like to raise 1 question on Page 8. So you can do the question here, over about 100,000 people. You received the responses from the 90s that people so the over 30% say further pressure. And also the -- perhaps some 40% or 46,000 people said they were broadly in the malpractice. Why they were cornered. So the to what extent did you have our investigations. So you -- we just talked about whether we resin instruction from the management or not? There are some possibility about 36,000 employees said yes. So what is your [indiscernible] will assessment about these situations? So normally, we can expect as many of the 36,000 employees are involved in the malpractice. So why that the -- were they involved in such malpractice? For example, that perhaps they are concerned with that the well HL issues and also that the well issue did investigate to that extent. So that this is -- that's something we need to investigate in terms of the instruction that whether we have instruction from the top management or not. So I think you're asking the background why that there so many people are involved in a practices.

So Mr. Kawai is going to explain to you, is it going to answer your questions.

Well, so that the 36,000 people said they were improved in buttress. So that the -- well, perhaps I wonder to how many people digital conductor interviews. So perhaps at the perhaps, I don't know whether they talked honestly or not. People could have been involved in demand process. This is a result of the questionnaire -- our questions. Therefore, it is not possible as to have interview with all the people. We put some aside for some business unit. Our subsidiaries, we visited such companies to conduct hearings and interviews. So well have a detailed investigation to each individual. So perhaps in the questionnaire, you have a role data to do how many people did you either conduct interviews. Well, we have some details on the duration in the report.

I'd like to give you some additional information and the banks come to the question here, 36,000 people. Within the group's -- so in Apache issues are found. So what is the reason of those plants, we try to solicit information from those people so that they choose that the cancers that they were under pressure to achieve the goals. So in other words, we cannot say the 36,000 people are involved in the practice. But I don't quite understand your conclusions. So that the well resource allocations and also that the -- and also at a stretch to go the pressures because of the elements intertwine with each other, leading to that quality in my practice. I think this is a very examples of the -- [indiscernible] or execute given by the top management, so this kind of interaction at should not take price because the top management that they created [indiscernible], for the EBITDA environment, so that the interactions. So in this case, the introduction of the sites and HBU, it seems that you don't blame that the anybody for those growth issues. I don't quite understand this count well the interconnections with each other of several elements.

Well, I'd like to answer your questions. Well, we don't say that the top management are not at all are involved in the discount of quote issues. Because we found so much pressure from the top management in trying to achieve the targets. So this is a pressure that the people and employees have failed actually. That is why that the individuals -- sorry, that the employees actually were a cone that you are going to conduct the practice. So that the conclusion here is -- the conclusion of this well, malpractice is the interactions with each other. So I don't understand this. When we are defeated in the last quarter, we didn't say something like other inductions. Because of the top management, to style of communication, I guess, perhaps that those parties were invited, so perhaps this is a conclusion -- I don't quite understand your conclusion. Your conclusion is the just interaction of several elements, I don't think this is quite correct.

Well, about the -- perhaps it is up to the definition of interactions with each other. Well, we don't say that you are that were we don't -- we didn't say that there isn't any pressure from the [indiscernible]. We believe that the pressure from the [indiscernible] is 1 of the reasons, good reasons why this kind of the quote issue happened so far.

Well, I would like to limit the question up 2 to persons.

So that the under the pressure by the top management -- so there were some injections to some extent. However, that well, you said that the reason for the map practice, they all the issues are the inductions, I don't quite understand why. So the gross pressure that well, that of course, the employees while at were forced to have some misconduct. It's up to that the well interpretations. So as a result of our cost analysis, as I have mentioned earlier, as a whole, we do see the structural program behind the issues of the qualities. You and corporate and sort of management, each of them has the well structured program. Therefore, of course, emphasize, there is a strong -- there is a service program at the level of the corporate management.

Thank you very much for your questions. In the report, we already stated in detail the top management was Intelisys structural programs on Page 81 to Page 83, please refer to those sections. At HBU is that perhaps top management, they placed the very stretched to goal, so they apply so much pressure, severe pressure over the business units. So this is the structural program held by the top management. That is why -- we didn't have any assessment that the management was not the 1 which blame. We said actually that the top management was also a responsible for these kind of issues.

So another question. So the person in the black chart are close to the entrance.

My name is Tokuda from Toyo Kansai. So I'd like to read 1 confirmation about our quality material got from #1 to #5 so able so that those 844 cases actually, comprises of those 5 that are got issues. So we have 5 items for the material quality if we fit 1 of those 5, this is regarded the word material quality. So you have a classification and the 5 categories. So if we hit 1 of those 5 quality -- sorry, a clarification, so you can delude such problem as material quality issues.

Are you asking whether we have [indiscernible], we don't have any involvement connections with any of those out of 5. We don't have any assessment about the valuations. The number one, the organizational environment, yes, we have some. That is 20 cases, yes. And about the well and also the issues for the public cases, there is no.

Okay. Then about the -- could you disclose that now? So classifications and also the certifications, I think I wonder whether you could give us a kind of the other hint.

Sorry that -- so possibility and suspect, variation of the regulations and recall and safety, we don't have such a investment at all. That is why that well, if we answer this question in detail, where we may invite necessarily our aspect. That is why we'd like to withhold that answering this question. Please understand.

Okay. Let me ask my 2 -- my second question. So more than 800 issues that arose since 2012 from the oldest case. And for a long time, it never came to light. And have you seen any intentional cover-up of inappropriate behaviors?

Mr. Kawai will answer that question.

So this is Kawai. So customer requirements to respond to customer requirements and I think there was a weakness to reconcile against the actual state. And monitoring and quality assurance did not function properly. That is another cost. And there is no issue with the functionality and safety. They had such assessment internally. And over a long period of time there were no issues. So that experience of not resulting in issue, that served as a justification for misconduct. And that is the reason why it was not discovered for many years. That's how we assess the situation.

Please raise your hand if you have any questions. Due to the schedule for the later day, I'd like to limit to 2 last questions, 2 more persons to ask questions.

This is Yamada from Toyo Keizai. I have 2 questions. I was reading the report and I was unable to digest the information. And so I was not paying attention to the question. So apologies if the questions were already asked. So there was a special mission general management cover up or concealment took place. So not just concealing. There was a team or a person that will take measures against possible discovery. Was there any cases or not? That is my first question.

Anonymous person came forth in the case of accounting fraud. But in the case of quality issues, there are no such equivalent person that came forth anonymously.

Understood. My second question, there was no instruction from the manager's level, lives of the management or the executives you mentioned. But some of the issues may have resulted in trouble with the customers, as I imagine. So to the management level, was there anything that was reported? So the head of the division that was engaged in misconduct. -- perhaps connivance of such act, but to management level, including Mr. Nagamori, was it ever escalated? And if so, what was the judgment made? Internally, if it is -- if it were handled internally, I would think that, that was that would be characterized as connivance. But how did you find out about such cases in your investigation, if any?

In the past, Mr. Nagamori and other executives, there were reports made to management regarding violations of compliance as well as regulations and there were instructions for improvement issued. So instruction for misconduct and connivance of misconduct at that time, it was not done. So the issue was addressed properly, it says.

So was communicated properly to the customer? Is that how it was handled? At least including in media. Well, whether you should disclose a lot is another question, but it seems like you didn't disclose such cases. So it says that it was handled appropriately and your understanding it's probably that it was handled appropriately. But what was done exactly? At that time, it was recognized that it was handled properly. By properly, what do you mean? Necessary disciplined reaction was taken, explanation was offered to the customer to revert back to a normal state. That is what was meant. Some companies would hold the past competence and with apologized to society at large, but such action was not taken in reality. Is that correct?

As far as I'm aware, that was not the case, but what is to be publicly announced or not is a management decision. I'm sure you understand. So based on such management decision, it was handled properly as we understand.

I'm very sorry to say this, but next person will be the last 1 to ask questions. So the person sitting close to the entrance, please.

This is Takeuchi from NHK. I have 2 questions. Sorry to be asking something very basic. So in this report, and the management level. The term management level does that include Mr. Nagamori?

Yes, he's included.

And there was a mention that there was no investigation going back before 2012, and therefore, it's not recognized as to whether such misconduct took place prior to 2012. But misconduct must have been repeated. So even though it was not recognized, maybe was there anything that indicated that it was done for a very long time in terms of inappropriate actions taken regarding quality issues? What is your view on that possibility?

Thank you for your question. In general, I cannot roll out that possibility. But from our perspective, what we recognize as evidence was after 2012. So that is what was written in the report. And before that, we cannot say whether such a case existed prior to 2012, where we cannot deny that such a case did not -- or we cannot deny that either. So with that, we will conclude the press conference. Thank you very much for your attendance, taking time out of your busy schedule. Now we'd like to get to the Nidec's press conference started. Here are the present as representing Nidec Corporation, Mr. Mitsuya Kishida, Representative Director, President and Chief Executive Officer; Mr. Masayuki Minai, who is the member of the Board of Directors, Senior Vice President and Chief Compliance Officer; and Mr. Takeshi Miyake, who is a member of the Board of Directors, Vice President and Chief Supply Chain Officer. I'm Keita Watanabe, Nidec Corporation's Corporate Communications Department and moderate this press conference. In this press conference, Mr. Kishida will give his opening remarks first, followed by his explanation on Nidec's response to and actions regarding the quality-related issues. Then the floor will be open for questions. Please kindly wait until then to ask your questions. Now opening remarks by Mr. Kishida.

I'm Kishida, Representative Director and President of the company. And after the discovery of a suspected in our property quality-related practices, we launched on May 13 and Investigation Committee comprising outside experts who conduct an investigation based on expertise and objectivity. I am very creditable to the members of the committee. Since the members of the committee have already explained the details on the report we have received from the committee. I would like to comment on the overall response from our company with respect to the report. Extremely surely accept the fact that the investigation identified cases of misconduct at multiple business units and business spaces of the business group in the area of quality assurance, which is the very base of a manufacturing company. We deeply apologize to our business partners, shareholders, investors, the market and society as a whole, for the anxiety and in convenience, these issues must have caused followed by the service of inappropriate accounting practices. With respect to [indiscernible] in the investigation, we promptly reported them to customers and verified that these issues have no impact, no impact on product safety. Additionally, while addressing individual issues and our CXO system, we are reviewing and improving Nidec's quality management system itself. Going forward, we will carefully -- we will carefully explain to our customers the investigation results and our investment measures in order to receive opinions and address them with sincerity. We are currently examining these issues impact on our performance together with the impact of corrections of the past fiscal year's earnings results. Our intention is to discuss them at the press conference scheduled for September 30. To be reborn as a company that does things right, we will company-wide promote a drastic improvement of the company's culture, systems and processes. If we may, we would like to continue our presentation on details seated from here on.

Next to Mr. Kishida, we'll explain the company's reaction to the investigation committee's investigation results. It was October 28 that our company was placed on a security on special alert. And right after that, we established Investigation Committee from there on, we established quality investigation working group. And after that, we have launched a company-wide, group-wide quality inspection. Within this quality inspection, we interviewed people at a business basis. We had individual people checking and we established quality opinion boxes. Those are our main activities and this new system, which was launched in April, we received a lot of opinions from many employees, and we decided to establish a committee after that, and we decided to launch a multi-phased investigations. With respect to these investigations, as has been explained already, we did in case the forensic investigation. And we have covered 35 business basis covering the 97,663 employees we utilized AI technology to collect opinions from a variety of employees, and we do some on-site investigations as well. in parallel to these investigations, we explain our situation to our customers. And these explanations are ongoing as we speak, many customers are eager to learn the results and findings and opinions from today's press conference. We will continue to explain this information with sincerity. And we will we have already started talking to our customers 1 after another, 1 by 1, necessary investment impairment and corrections correct measures will continue. At this moment, as of now -- at this moment, there is no report of any cases that has impact on the product safety. With respective functionalities of our products, there are 2 cases about which we are going -- we are continuing to have negotiations discussions with our customers. We will sincerely continue these discussions to take appropriate actions. With respect to possible future issues, we will take actions promptly our customers take presence over internal logic. We need to have a pride in our product, and we need to make the quality of our top priority and that's the type of change we are making happen. That's the type of commitment we are going to have. And we have started taking such measures to or that goal. Based on the result of the net results of the investigation we accept all the results from the mitigation with sincerity. And we deeply apologize to our customers and all the other stakeholders that we have. And after accounting in appropriate practices, we have started our proactive investigations and many things have been identified. And based on the results of the investigation committee's investigation results, we have confirmed these matters as facts. We have issues with our corporate culture, processes as well as systems. We need different systems, new systems to be introduced into our company. we are determined to take appropriate actions based on this new policy. From today onwards, we will have new realization of these facts and we are going to launch new measures, which will be explained by Mr. Miyake. And I will give you some closing remarks after that. Mr. Miyake please.

This is Miyake speaking. I would like to provide you with the information regarding the results of the investigation by the Investigation Committee. As I will not go into details, which have already been explained by the Investigation Committee. We have a total of 850 in its conduct, including 844 quality related and 6 cases that are in appropriate labeling of country of origin information were found. 95.4% or 84 or 5 cases of the quality related to misconduct our 4 changes, roll violations made without informing a customer in Netherlands of obtaining its prior consent and material quality related [indiscernible] our 60 cases in total. With respect to falsification, fabrication testing results and a violation of testing results were also found and we take these facts extremely seriously, and we will take appropriate actions for these matters and foreign change roller violations account for more than 90% of all the issues that we have found. And within our organization, these importance of these roles were neglected or ignored in our organization. Next slide, please. This is results by BU with respect to quality account misconduct cases as well as significant quality cases. If you take a look at the left-hand side, you can see the number of the total cases, medicines, Nidec Mobility, Nidec Technomotor, these 3 BUs account for 91% of the entire cases. It may look as if these issues were considered to specific deals and organizations. Maybe if you take a look at the next chart, you can see several top instruments has the percentage decreases and AMC organic and other companies have more issues, as you can see. Just because the number of the issues is large, doesn't necessarily mean that your company or organization has a most -- the largest number of issues. If you take our quality-related issue called instruments sometimes have the cases of coming up with the fictitious numbers results that were submitted to its customers with Nidec Mobility band substances were used without prior consent of a customer, among other cases. These are all depending on the situation differs from 1 company to another based on the business circumstances and other elements. Sometimes there is mismatch in information. there was not rolling fully capable functional systematic processes in place. These are the very sales as we have to take as a company. For these cases, we have already reported these cases to our customers, and we have done required technological verifications. We will continue with our efforts and we will take appropriate measures and careful measures. We need to reestablish our change rules and we need to inform everyone of these rules. And based on the futures and characteristics of individual organizations, we need to make sure to have a recurrence prevent measures comprehensively. We will continue to work the company-wide to obtain regain the trust of our customers in Nidec.

Okay. Then next, we would like to invite Mr. Minai, who is going to talk about the future actions that we are going to take.

So based upon the result of the investigation by the investigational committee, we will take ratio sincere measures, we'd like to make an all efforts to regain the trust as was already introduced that well based upon the improvement plan for the accounting misconduct. We have already started the countermeasures, but based upon the result of investigation, we are further augment our improvements, we will add some more measures. About the pillar those measures agriculture and system process, these 3 pillars. So since come to the organization, of course, we should not try our customers. We should make much of that quality. We'd like to protocol. This is a system we need to create as a company. So Nidec as a whole, I would like to make every effort. After this space, you would like to explain to you about the details. And first of all, that the system and processes for each. So as you already know, that we had issues about accounting the problems. We already started some countermeasures. Based upon that, we are going to enhance more measures. First of all, the system. So well, that we already took some actions that the accounting program, for example, we review the governance by the BOD, and we enhanced accounting system. [indiscernible] to this, this time because of quality issues in the short term and the midterm and long term. So we are going to take necessary measures in the short term Well, that the QA should be independent, we'd like to enhance independent if something arises. So QA should have the authority to stop the operation on site. So in other words, we are going to give the authority highest to the QA. You mentioned to that the corporate QA, so the demote and audit is going to be enhanced. So in action to those short-term actions, you are going to review the authority division of the authority and the image division. So roles and responsibility edition making needs to be more clarified in each other tier business. And also QA needs to be enhanced, including we need to hire more people, more excellent people for growth assurance. Furthermore, about the processes. are accounting issues that we review that the business processes and also internal data control and also with blowing are being reviewed. In addition to those, so based upon those quality issues as additions, as shown here, Bob we are well, realize this. So that the QA Eat system should be reduced. So we are going to finalize the basic rules for QA globally. When something arises, so we need to be different that we need to receive the escalation to the other corporate headquarters. So in other words, we need to enhance the reporting lines and also mid and long land across their organizations so that the value chain should be established from the R&D to the operations and the manufacturing. And also about the quality data, we need to have more transparency about the quality data and also that we need to enhance the traceability by which we can see the quality data at anywhere, but any time. And finally, about the corporate culture. So as a whole company, of course, that the quality compliance, including the accounting. So in order for us to regain the trust, so the well last company, we need to the change our culture. This is quite important for us. Last year, However, since the last year, we already started a cultural change. On a daily basis, we have been making a report. So on your left-hand side, the culture, there are 4 items in the culture unless we realize those, we will continue to change our culture on steady basis. So the culture we want to attain is that to have the right actions rewarded. We are going to enhance the quality and compliance way comes first always, not only the QA, but they are other people in own layers and all operations should be responsible for the quality. And the same thing can be said for compliance, on every 1 of the people working for Nidec should be responsible and also speak up about the news first. So these are the items we wanted to realize on this we achieve. We will continue to change our corporate culture. Financial details the actions are shown here on the right side. So we are going to be restricted that the interactions solve the matters and also communications message needs to be enhanced still further. Also the CXO, the present several leaders should at announced the message globally. And also , we need to create a common understanding. Furthermore, so we need to have a good communication with sites through the town halls, we need to continue to do this and also compliance educations including QA, should be continued on a steady basis. So we will continue to have those measures. And to every 1 of us has a good culture at the well mind set. By doing those the actions, try very hard not to cause any problems the troubles to anybody related. So from now on, so the financial balance and also the business impact also future well perspectives. So well, we like to be very sincere to since for the customers and also that we are going to continue to the necessary other defects toward the result meetings, of course, we have already started our measures. At this moment, so that the -- we are now at assessing that impact to the financial impact to the situation. The financial impact in individual matters, we have found that the no matters have been identified that are expected to have the material effect on the Nidec group. So about the business impact. So that we will continue to talk to the customers, and we will make corrections, so we will examine whether we have any duty impact to the customers and also the products. At this moment, we don't have any major recalls or operation itself, we don't see any negative impact. Also the result outcome of the investigations at the main side of the group that we have found that the issues . So those issues have been reported repeated. So these are the core of the trust of the manufacturer, so those are very important factors to take. So we want to share the value. And also we wanted to recreate our system business operations. Well, we have some structural programs shown by the investigations corporates and sites. So at each level that we will try to create a penetration and as the grows, we'd like to make a steady effort. So there are 5 pillars. So these are the -- we have already started the revision of our business and also business portfolio is essential for us. We have already started partially for such portfolio review. So -- and also close to the business and also pathways, but it should be added as the [indiscernible]. This is a new initiative. So we have take this initiative. And about quality and governance, so human rises was such that we are going to make investment due to human resource to support. And also, IT infrastructure is already shown to you. In the future, we try not to cause any admins conducts, we are going to create recreate our IT infrastructure. So we will continue to have the correct regions, correct management. So these are the basis for our business. So based upon the well report of the mitigation today, would like to be sincere in are talking to our customers. And also by September 30, we are going to Security report and other documents around those timings that we are planning to have a press conference about the result. And also on the end of October. So internal control is going to be confirmed. So we are planning to submit the document for internal control. And also around the end of this year. So we have a 5-year plan for revision, we will update such the phone plan. Well, on a steady basis quality and also accounting, and we will continue to take the measures continue to monitor those actions. And also to internal and also outside parties, we will continue to report the current status, most of today's status of our efforts. With this, we'd like to conclude our presentation. Thank you very much for your kind attention.

Then from now on, we'd like to entertain your questions. [Operator Instructions] Yes. Okay. The -- okay, the close to the entrance, the second from the top.

So my name is [indiscernible] Newspaper. So my first question about investigations. So structural proms shown by the investing report, what is the reaction to this. in all while you were working as Vice President, you have been involved within the management of the company that receives the result of these evaluations, which includes structural situations. Perhaps the -- I guess, you have noticed this kind of situation, you discounted problem. However, you are not able to take any actions. So including our loan so would you please share with us your reactions?

Thank you very much for your questions. So I already said earlier, this time. So that the -- we identified the issues so that the linac those quality issues are very important issues. These are the basis that create a transfer to customers. Therefore, that we take those certain instances and report investigation result seriously. And I could have done something. Of course, I have this can look back. Well, in [indiscernible] to work for this company? Or of course, in order for us to become a better company, I have been involved in many different types of reforms so far. So in some cases, we're able to [indiscernible] well -- we are able to take good action. Sometimes we're not so that the culture and the process system needs to be further reformed this determination after the result of the investigation report. For example, that well, perhaps because you grew up very quickly through M&A, but interim control may not be [indiscernible]. So is this something you noticed already?

Well, so globally, our system was not very strong. But I began to realize this as we receive the investigation report. Well, the headquarters and also that the local and regional headquarters management at the level in terms of the human resource allocation to such, I think we are rather weak. So I have already the others this. So how we are going to augment this, including human resources and also the human resource education. I think this is something we need to still making a further airport. So these are the findings throughout the process and systems about those. Well, of course, we need to have our investment into the human resources. And of course, it entails some costs. The headquarter is very thin in a sense because we try to set money however that our company has grown to this level. Well, whether we can continue to grow or whether we can continue the healthy operations. Well, that we used to have program. That is why we wanted to reform our system and process.

So my second question. In terms of outlook on outlook and the impact on business and finance. So there are 60 material cases. And the ranking of importance or material or given that could potentially lead to recall safety issues. So there are 60 cases found. But you say that you have not found anything that could impact finance. Could you explain in more detail why you think so?

Of course, the customers evaluation will be made after we make a full package of what we have found, what the improvement measures we are to take and we will continue the relationship with the customer after presenting the whole package and closing this matter. And in most cases, we have interacted with our customers, but many customers say that as a company as a whole, there should be measures to prevent recurrence. So there should be a group-wide mechanism that should be presented. That has been asked for. And on that point, we are the timing to take appropriate measures and move forward. So in that context, major recalls or large-scale compensation payments are not expected to arise. So even if there is a recall, it won't take place with products that are selling well, and therefore, the impact will not be that material. Is that the image you have? It's not based on whether the product is selling well or not or hit products or not including technical verification, we don't recognize anything that may turn out to be large care equals.

Understood. So far, there was pressure against high level targets and there were a lot of improper practices that took place on the front line. But if you're not engaged in an appropriate practices to reduce cost, then that would potentially impact the financial performance. So what would be the impact or the scale of that?

I think the point is missed a bit. So the cost in front of you, being engaged in activities to reduce the cost is not the only kind of cost reduction activities as a manufacturer. We should take a long-term view. And there may be actions that can be taken from a long-term perspective to bring about reform to the current state, and that will bring good results to financial performance. And that is at the center of what we intend to do in terms of doing the right thing. So in that sense, responses or over emphasis on the short-term achievement that will be rectified.

So we need to limit the questions to 2 per person. So we will move on to the next person. The 1 the person that's sitting on the front.

I have 2 questions. I'm [indiscernible]. So the -- looking at the cost analysis of the Investigation Committee report, there are a lot of overlaps the cause behind the accounting fraud. So once again, the inappropriate practices of quality and the accounting fraud could we have your comments on the true cause of these issues.

Thank you for your question. Let me answer your question first. And Mr. Miyake and Mr. Minai, if you have any additional comments, please go ahead and make the comment. So this time around, what we are talking about is culture system and process. And here, once again, well in the report by the Investigation Committee, what we want is referred to as culture, that is connected from the accounting fraud to inappropriate quality practices. But this time around, 1 of the major steps of the investigation committee is that there are specific issues with quality when it comes to system and process and for specific BUs or specific sites. And there are other -- there should be other reasons behind the issues. So unless measures are taken for those particular issues, we cannot resolve these issues. That's how we understood as what was pointed out in the report. So in that sense, we want to categorize issues into system and process. I have the same understanding. So there are 3 common factors, system, process and culture. And as for system and process, there are quality specific issues identified. So from the headquarters of Nidec to all entities around the globe, it should be shared across the board, and we need to create something that is more appropriate. So when it comes to quality, this holds true for accounting, but from development to shipment a wide range of processes would create quality. So in that sense, there should be proper system and manufacturing processes that would run across the entire organization. Mr. Miyake, do you have anything?