(Bloomberg) -- Masahiro Nakai, a former J-pop star turned TV host, said he was retiring following sexual harassment allegations and broadcaster Fuji TV announced a fresh probe into the matter, which has spooked advertisers.
The TV company has denied tabloid reports that its employees were involved in setting up a party at which the incident took place. But its response to the scandal and a call for more transparency have prompted big corporations to suspend advertising, hitting parent Fuji Media Holdings Inc’s shares.
“I am sincerely sorry for causing so much trouble and losses to so many people,” Nakai said in a statement on his company’s website. He apologized to the victim and signed off with: “Thank you for these 37 years. Sayonara.”
The highest-profile criticism has come from James Rosenwald-backed activist investor Rising Sun Management Ltd., which owns more than 7% of Fuji Media and urged it to set up a third-party inquiry. Fuji TV said Thursday it would set up an independent panel which will submit its findings by the end of March.
Sponsors including Toyota Motor Corp., McDonald’s Holding Co. Japan Ltd., Nissan Motor Co. and Seven & i Holdings Co. have suspended advertisements at Fuji Media Holdings Inc.’s TV station, and the broadcaster said ad revenue loss may hurt its bottom line. The uproar has also created an opening for activist investors to try to breach one of Japan’s biggest broadcasting networks.
Shares of Fuji Media closed down almost 8% Thursday, breaking a four-day streak of rises as trading volumes jumped. The spread on its corporate bonds widened to a record high on Thursday.
The 52-year-old Nakai had previously apologized on his website, acknowledging that there had been “trouble” while saying there had been no violence involved in the incident. The two sides had reached a settlement and agreed not to disclose further details, he said.
The story was first reported in December by local weekly Shukan Bunshun, which alleged that a Fuji TV staff member helped organize the meeting between Nakai and the woman.
“At stake is the issue of governance,” Fuji TV Vice Chairman Ryunosuke Endo said during a regular news conference as the chairman of the Japan Commercial Broadcasters Association. The response from advertisers is “confronting us with a firm ‘no,’ regarding our governance,” he said.
As one of the members of SMAP — one of the most popular boy bands managed by the late Johnny Kitagawa — Nakai has been a longtime fixture on Japanese TV. After Kitagawa’s death in 2019, his once-legendary talent agency was hit by a flood of allegations he had sexually abused young boys.
Rising Sun’s intervention came after it last year recommended Fuji Media be taken private in a leveraged management buyout, in which it expressed eagerness to take part. The group cited lackluster share price performance and low return on equity and said Fuji Media needed to be broken up.
--With assistance from Takahiko Hyuga, Haruka Iwai and Natsuko Katsuki.
(Updates with Fuji TV executive comment)
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