By Rocky Swift
TOKYO (Reuters) -Japan's Fuji Media said on Monday its chairman and the head of its TV unit would step down immediately amidst a probe into alleged sexual misconduct by a celebrity TV host.
The scandal, which has led to an exodus of advertisers and investor calls for a management shake-up, has also raised concerns about the exploitation of women in Japan's entertainment industry.
In December, Japanese magazines accused Masahiro Nakai, a TV host and leader of the former boy band SMAP, of sexual misconduct. While Nakai has worked for many of Japan's TV networks, the dinner at which the incident occurred was reportedly arranged by one of the broadcaster's executives.
One of the magazines, Shukan Bunshun, has also reported the same executive had in a separate event gathered female TV personalities at a hotel to act as entertainment for Nakai and other celebrities.
Nakai, 52, has apologised for causing "trouble" and announced his retirement from show business. He acknowledged reaching a settlement with another party but has not addressed the allegations directly. Nakai did not respond to a Reuters request for comment.
Fuji Media said Chairman Shuji Kanoh and the head of its TV unit Koichi Minato would step down effective Monday. Another TV executive, Kenji Shimizu, will lead the TV unit.
According to tabloid magazines Josei Seven and Shukan Bunshun, a woman was invited to a dinner in June 2023 with a Fuji TV executive that Nakai also attended. But the executive backed out at the last minute leaving her alone with Nakai and there was a sexual act against her will, they reported.
"First of all, as a person, I would like to offer my sincere apologies to the woman involved to whom we were unable to show adequate care and awareness of human rights," Kanoh told a press conference.
A Fuji Media spokesperson said the company became aware of the woman's complaint that June but did not widely investigate it or report it due to privacy concerns and settlement talks between the parties.
The company also said on Monday that it had questioned an employee multiple times about the dinner and that the employee had denied knowing about or arranging the dinner.
Outrage over the scandal grew after a Jan. 17 news conference by Minato that was closed to most of the press with Minato answering few questions.
Dozens of big-name firms including Toyota (NYSE:TM) and cosmetics giant Kao have suspended advertising with Fuji and most of its ads are currently public service announcements.
Fuji Media has promised an independent investigation by a third-party committee. It will be made up of three lawyers and is scheduled to submit a report by the end of March.
Activist investors who have criticised Fuji Media's handling of the crisis include U.S.-based Dalton Investments, its second-biggest stakeholder at 5.8% based on LSEG data, as well as Zennor Asset Management, a UK-based fund which holds just over 1%.
Zennor said in a statement that the actions of the board showed "the company is finally taking this matter as seriously as they should."
It added, however, that it thought the broadcaster needed to embark on a thorough review of its governance and that there was a strong case for a new leadership team from outside the Fuji Media group.
After plunging in late December and early January, Fuji Media's shares regained ground, bolstered in part by hopes for a major corporate shake-up and are now trading some 14% higher since news of the scandal first broke.
The proliferation of scandals involving sexual violence and coercion in Japan in recent years is reminiscent of the #MeToo movement that gained momentum in the United States in late 2017.
In 2023, Japan's top talent agency, Johnny & Associates, announced it would dissolve after a BBC documentary exposed how its founder Johnny Kitagawa abused members of boy bands for decades.
Among Kitagawa's biggest creations was SMAP, which launched Nakai and his bandmates into stardom in 1988.
Last week, the Japanese documentary "Black Box Diaries" was nominated for an Academy Award for its depiction of a woman's search for justice after accusing a high-profile journalist of rape.