Antonia Jenae, 44, claimed the billionaire Virgin boss had put his face in her cleavage after she had been invited to his Caribbean home alongside music star Joss Stone.
Ms Jenae, a backing singer, told the Sun the alleged incident happened "totally out of the blue" and that she was "shocked" by it, adding: "His behaviour was disgusting."
She told the paper she was speaking out following the scandal that has engulfed Hollywood.
A spokeswoman for Virgin Management said Stone, members of her family and her band had been invited to Necker Island in June 2010.
She added: "Everyone appeared to enjoy their time on the island. Richard has no recollection of this matter and neither do his family and friends, who were with him on the island at the time.
"There would never have been any intention to offend or make anyone feel uncomfortable in any way and Richard apologises if anyone felt that way during their time on the island."
Virgin also issued a statement from Stone's father, Richard Stoker, who was on the island at the time.
In it, he said: "Joss and the group had a wonderful afternoon on Necker Island, everybody entered into the party spirit and it was wonderful getting to know Richard and his family."