Fuji Media Holdings is under massive pressure over its handling of allegations against prominent Japanese TV star Masahiro Nakai.

The scandal began in December when the magazine Shukan Bunshun reported that Nakai had paid a large settlement to a woman following an alleged incident at a dinner in 2023. The meeting was said to have been arranged by an employee of the broadcaster Fuji TV. Nakai admitted in a statement on his management's website that there had been "issues" but denied allegations of violence. On Thursday, he announced his withdrawal from the entertainment industry.

Fuji Media's response to the allegations met with sharp criticism from activist investors. A shareholder group led by Dalton Investments, holding more than seven percent of the shares, accused the company of lacking transparency and demanded an independent investigation. The management responded with a press conference, which, however, only allowed limited media access.

After an extraordinary board meeting on Thursday, Fuji Media announced a fully independent investigation. Prior to this, Fuji TV President Koichi Minato had promised an investigation but had not confirmed that only external experts would be involved.

Long-term investors sharply criticize the company's governance structures. David Mitchinson of Zennor Asset Management, which holds more than one percent of the shares, described the handling of the scandal as a "profound governance failure." The incident raises the suspicion that Fuji Media has tolerated a culture of moral negligence for years.

The affair damages the corporation's reputation at a time when Japanese companies are increasingly under the pressure of corporate governance reforms. Media analysts warn of long-term impacts on advertising revenue, even though all advertising slots have already been paid for in the short term. Nomura analyst Ryohei Harahata emphasized that whether advertising clients renew their contracts will be crucial for the future development of Fuji Media.

Meanwhile, activist investors are demanding a realignment of the group. Speculations about a possible sale of real estate holdings – including an office tower in the Otemachi financial district in Tokyo – as well as stakes in other listed companies are gaining momentum.

The Fuji media affair has reignited a debate in Japan about institutional failures in handling harassment allegations in the media industry. As early as 2023, talent management company Johnny & Associates came under pressure following allegations of systematic abuse of young artists.