A creative business depends entirely on the trust of its partners
In Japan's creative economy, where thousands of independent artists and writers sustain the cultural output of major media companies, KADOKAWA Corporation now faces a second enforcement action from the Fair Trade Commission in under a year — this time for failing to honor basic contractual transparency with over a hundred freelancers. The pattern raises a question older than any compliance manual: when an institution promises to change and does not, at what point does the failure become a statement about leadership rather than process? As a shareholder vote approaches, the answer may soon be rendered not in policy documents, but in ballots.
- Japan's Fair Trade Commission is preparing a second enforcement recommendation against KADOKAWA in less than a year, signaling that the company's promised reforms after November 2024 did not take hold.
- More than 100 freelance writers, illustrators, and stylists faced delayed payments and unclear contract terms — disruptions that, for independent workers, can cascade into genuine financial hardship.
- Activist investor Oasis Management has framed the repeat violation as proof of a governance failure that no internal policy fix can resolve, escalating its campaign against CEO Takeshi Natsuno ahead of the June 24 AGM.
- Oasis is asking shareholders to vote against Natsuno's reappointment and to support his outright dismissal from the board, arguing that a creative company cannot function without the trust of the creators it depends on.
- The June 24 annual general meeting now stands as a decisive moment — not just for KADOKAWA's leadership, but for whether its owners believe the company's problems are structural enough to demand new hands at the helm.
Japan's Fair Trade Commission is preparing to issue a second enforcement recommendation against KADOKAWA Corporation, this time under the nation's Freelance Protection Act. The company allegedly failed to provide clear written payment terms to freelance writers, illustrators, stylists, and other creative workers on magazine projects — conduct that reportedly continued from winter 2024 onward and affected more than one hundred people whose income depends on predictable, transparent payment.
What makes the situation particularly damaging is the timing. In November 2024, the JFTC had already issued a recommendation against KADOKAWA for similar violations under the Subcontracting Act. Management responded with promises of corrective action and strengthened compliance systems. The emergence of a second enforcement action — for conduct that allegedly occurred after those promises — suggests the remediation either fell short or never reached the underlying problem.
For the freelancers involved, the consequences were not abstract. Delayed payments and unclear contract terms create real uncertainty for independent workers trying to manage rent, materials, and the basic costs of sustaining a creative practice. At a scale of over one hundred affected individuals, this looks less like an isolated oversight and more like an embedded pattern.
Oasis Management, a significant KADOKAWA shareholder, has called the development deeply concerning and argues that a media company built on creative collaboration cannot afford to repeatedly breach the trust of the very people who make its work possible. The firm has been building a governance case against CEO Takeshi Natsuno for months, and the second JFTC action has sharpened its argument considerably.
At KADOKAWA's annual general meeting on June 24, 2026, Oasis is asking shareholders to vote against Natsuno's reappointment and to support his removal from the board entirely. The case is simple: if management promised reform and the violations continued, the problem is not the policy — it is the leadership. The vote will determine whether KADOKAWA's owners agree.
Japan's Fair Trade Commission is preparing to issue a second enforcement recommendation against KADOKAWA Corporation, the sprawling media and publishing conglomerate, this time for violations of the nation's Freelance Protection Act. According to media reports, the JFTC found that KADOKAWA failed to provide clear written terms—including payment deadlines—when contracting with freelance writers, illustrators, stylists, and other creative workers on magazine production projects. The violations allegedly continued from winter 2024 onward, affecting more than one hundred freelancers whose livelihoods depend on timely, transparent payment.
The timing of this second enforcement action is what makes the situation acute. In November 2024, just seven months earlier, the JFTC had already issued a recommendation against KADOKAWA and one of its subsidiaries for similar violations under the Subcontracting Act—this time involving fees paid to writers, photographers, and other business partners. At that time, company management promised corrective action and said it had strengthened compliance systems to prevent recurrence. The fact that another JFTC recommendation is now imminent, for conduct that allegedly occurred after the company's promised remediation, suggests those measures either were not implemented effectively or failed to address deeper structural problems.
Oasis Management Company Ltd., an investment firm that controls significant shares in KADOKAWA through its private funds, issued a statement calling the development "deeply concerning." Oasis argues that a creative business like KADOKAWA depends entirely on the trust and cooperation of external partners—writers, illustrators, and other creators—and that repeated violations of basic legal obligations toward these stakeholders reveal serious gaps in compliance, internal controls, and management oversight. The firm has been vocal about governance failures at the company and has specifically criticized CEO Takeshi Natsuno's leadership throughout his tenure.
This is not a theoretical concern about process. The alleged conduct—failing to state payment terms clearly and delaying payments—directly harmed real people. Freelancers who depend on predictable income from their work faced uncertainty about when they would be paid and under what terms. For creative professionals operating as independent contractors, such delays can threaten their ability to pay rent, buy materials, or sustain their practice. The scale of the problem—more than one hundred affected workers—suggests this was not an isolated mistake but a pattern of practice.
Oasis has seized on the second JFTC action as evidence that the current management team cannot be trusted to fix the company's problems. The firm released campaign materials in May 2026 detailing what it views as inadequate governance and accountability under Natsuno, and it is now calling on shareholders to act. At KADOKAWA's annual general meeting scheduled for June 24, 2026, Oasis is asking shareholders to vote against Natsuno's reappointment as a director and to support Oasis's own proposal to dismiss him from the board entirely.
The argument is straightforward: if management promised to fix compliance problems in November 2024 and those problems persisted or recurred, then management has failed at a fundamental task. Oasis contends that KADOKAWA needs not just stronger rules or better training, but new leadership—people capable of rebuilding trust with shareholders, creators, employees, and all the other stakeholders whose cooperation the company requires to function. The shareholder vote on June 24 will be the moment when KADOKAWA's owners decide whether they agree.
Notable Quotes
A failure to comply with basic legal obligations toward these stakeholders would reflect serious weaknesses in compliance, internal controls and management oversight.— Oasis Management Company Ltd.
The persistence of these issues and the apparent failure to implement effective remedial measures following the 2024 JFTC recommendation suggest that meaningful management change is necessary.— Oasis Management Company Ltd.
The Hearth Conversation Another angle on the story
Why does it matter that this is the second JFTC warning in seven months rather than just one?
Because it shows the first warning didn't work. Management said they fixed it. They didn't. That's not a compliance problem anymore—that's a credibility problem.
But couldn't there be a lag? Maybe they did fix things, but this conduct happened before the fix took hold?
The conduct allegedly happened after winter 2024. The first warning was November 2024. So the timeline doesn't support that story. It looks like either they didn't actually change anything, or the changes were so shallow they didn't touch the real problem.
What's the real problem, then?
That's what Oasis is arguing—it's not just about payment terms or deadlines. It's about a company culture that doesn't treat freelancers as stakeholders whose rights matter. You don't accidentally fail to write down payment terms twice. That's a choice, conscious or not.
How does this hurt KADOKAWA beyond the legal penalties?
Creative businesses live on reputation and relationships. If writers and illustrators don't trust you to pay them fairly and on time, they work elsewhere. You lose talent. You lose the ability to commission work. The business itself becomes fragile.
So Oasis is arguing that bad governance is also bad business?
Exactly. They're saying Natsuno's leadership has failed on both counts—legally and strategically. The company is violating laws it promised to follow, and in doing so, it's damaging the trust that makes the business work.
What happens if shareholders vote Natsuno out?
That's the open question. Oasis believes new leadership can rebuild that trust and actually implement real compliance. But it's not guaranteed. It depends on who replaces him and whether the board is willing to make deeper changes.