January 27, 2025
TOKYO – A career-ending sex scandal involving one of Japan’s most bankable stars has snowballed into a corporate governance nightmare and a textbook cautionary tale of how crises should never be managed.
The spiralling controversy involves Masahiro Nakai, the 52-year-old media personality who was the leader of defunct male idol group Smap, and mainstream broadcaster Fuji Television.
It also highlights the growing role that foreign activist shareholders are playing in compelling change in stuffy Japanese boardrooms.
The fallout from the scandal continues, even after Nakai quit show business and dozens of household brand names yanked ads from Fuji TV. Parent company Fuji Media Holdings will hold an extraordinary board meeting on Jan 27.
Nakai is said to have committed sexual assault against a Fuji TV employee in June 2023, weekly tabloids reported in December 2024, alleging that it was “common” for producers and executives to arrange encounters between young female colleagues and male celebrities.
The tabloids reported that Nakai paid 90 million yen (S$777,000) to settle the matter out of court. The sum is much higher than what the courts had awarded in a previous similar case: Journalist Shiori Ito, whose film Black Box Diaries (2024) about her high-profile sexual assault ordeal is in the running for Best Documentary at the upcoming Oscars, was awarded 3.3 million yen in damages in 2019.
Nakai admitted on Jan 9 that there was “trouble”, but added: “With the settlement reached, I can continue my entertainment activities without issues going forward.”
That was wishful thinking. Over the next two weeks, public attention only intensified due to developments such as Fuji TV’s own botched attempts at putting the controversy to bed.
With Nakai’s regular programmes across multiple broadcasters scrapped, he announced his retirement from show business on Jan 23, saying: “I am incredibly sorry for all the trouble and damage I have caused.”
As questions continued to swirl over whether Fuji TV and Fuji Media Holdings were silently condoning inappropriate behaviour to curry favour with male stars, US activist shareholder Dalton Investments and its British affiliate Rising Sun Management launched a broadside.
With a stake of over 7 per cent in Fuji Media, they said in a Jan 14 letter that the scandal “exposes serious flaws in your corporate governance”, calling for an independent third-party committee to probe any improprieties and warning that slow action could lead to “a decline in viewer ratings and the defection of sponsors”.
Under pressure, Fuji TV president Koichi Minato called a news conference on Jan 17 that backfired and fuelled even more outrage.
Ironically, for a media company with a news reporting division, the presser was stacked with restrictions. Only members of the press club could attend – thereby shutting out a majority of media – while no cameras were allowed.
Mr Minato, 72, offered what were perceived as platitudes and non-answers as he pledged to launch a probe, which did not include independent third-party members as shareholders had called for.
While he admitted to having known of the incident since June 2023, he said he did not think it warranted disclosure because “we prioritised the woman’s physical and mental recovery as well as the protection of her privacy, considering it a highly sensitive matter”.
That argument cut no ice when it emerged that even Fuji TV’s own compliance team was kept in the dark. Critics argued that the company seemed more interested in protecting Nakai.
Within days of the news conference, nearly 80 of Japan’s largest advertisers, from Toyota Motor to McDonald’s to Shiseido, yanked their ads and sponsorships from the channel.
Even government ministries and the upcoming Osaka World Expo, which opens on April 13, are reassessing their partnerships with Fuji TV. Internal Affairs Minister Seiichiro Murakami urged a swift and independent probe.
On Jan 21, Rising Sun sent a second excoriating letter accusing Fuji TV of a news conference that was “nothing less than a virtual car crash”.
“It was an object lesson in how not to handle crises like the current one,” it added, noting that the reluctance to form a truly independent commission would only raise suspicions of a cover-up.
Fuji TV eventually back-pedalled. On Jan 23, it said it would establish a third-party committee based on the guidelines of the Japan Federation of Bar Associations, which means the panel would be formed by members without any vested interests in the company. The investigation results would also not be disclosed to Fuji TV in advance.
The same day, Mr Minato reportedly held a 4½-hour closed-door town hall for disgruntled employees.
Fuji Media Holdings will call an emergency board meeting on Jan 27, with Mr Minato said to be considering stepping down, and then a news conference that it has promised to keep open to all agencies.
The scandal has prompted extensive soul-searching across Japan’s entertainment industry, with other broadcasters also launching their own probes to look into potential misconduct.
Corporate governance experts told The Straits Times that the Fuji TV debacle exposes the dangers of poor governance.
Japan Corporate Governance Network president Shin Ushijima noted that the absence of independent directors on Fuji Media’s board means a lack of different perspectives that could have prevented the missteps which plagued the company along the way.
This included the Jan 17 news conference that was “worse than a joke”, said Mr Ushijima, who founded Tokyo-based law firm Ushijima & Partners.
“Fuji Media’s board needs to have a serious review of how it is running the business,” he said, while adding that shareholder activism has made stultifying Japanese corporate boardrooms more sensitive to global trends, including the stronger emphasis on human rights.
International management professor Parissa Haghirian of Kyoto University of Advanced Science agreed, pointedly saying: “Apparently nobody in the Fuji TV board had realised that outside of Fuji TV, such practices (like trying to sweep scandals under the carpet) are outdated.
“Even in Japan, where there has been a bit more tolerance towards power, people are increasingly questioning processes, and above that, there is an international audience who will not tolerate this at all.”
- Walter Sim is Japan Correspondent at The Straits Times. Based in Tokyo, he writes about political, economic and socio-cultural issues.