Japanese pachinko mogul sues Wynn Resorts in Tokyo
TOKYO (AP) -- Japanese pachinko tycoon Kazuo Okada has filed a lawsuit in Tokyo District Court seeking $140 million in damages from casino operator Wynn Resorts.
Universal Entertainment said in a statement Wednesday that it is seeking damages for harm caused to its share price and business due to Wynn's decision to remove Okada as a board member and reclaim the $2.77 billion of shares in the company owned by Okada's company, Universal Entertainment Corp.
Okada and billionaire Steve Wynn, the co-founder, chairman and CEO of Wynn Resorts, are former friends and business partners, but have been trading accusations of improprieties as regulators investigate alleged violations of U.S. anti-corruption laws on both sides.
The lawsuit filed in Tokyo this week is demanding 11 billion yen ($140 million) in damages. It alleges that Wynn's actions and comments hurt Universal Entertainment's stock price, hindering its business opportunities and damaging Okada's reputation.
"This action asserts that Steve Wynn has indulged in fraud, deception, theft and betrayal to maintain control of his gaming enterprises and enrich himself based on a false and predetermined pretext," Universal Entertainment said in a statement.
Universal's spokesman in Tokyo was not immediately available for comment. Nor were Wynn's staff in Macau.
The two sides have been feuding for months. Wynn refused to back Okada's plan to build a $2 billion casino resort project in the Philippines, saying it would compete with Wynn Resorts' own business there. Meanwhile, Wynn commissioned an investigation and sued Okada in Nevada for alleged breach of his fiduciary duties and other "gross improprieties."
In March, Universal countersued, questioning a donation by Wynn Resorts to the University of Macau that is now being probed by the U.S. Securities and Exchange Commission and Nevada Gaming Commission as a possible violation of the Foreign Corrupt Practices Act.
One of Japan's wealthiest businessmen, with net worth over $1.8 billion according to Forbes, Okada started out selling jukeboxes and then expanded into selling the machines used in pachislot, or slot machines, and pachinko, a popular form of pinball that skirts Japan's law against gambling by awarding prizes that players can later swap for cash.
Okada owns his Wynn Resorts stake through his Japan-based casino game company, Universal Entertainment Corp. The company has said it will seek a court order to prevent the forced buyback of his 20 percent stake in Wynn Resorts.
Wynn Resorts said in a regulatory filing on Wednesday that its investigation showed "Okada has not been acting in the best interests of the company and its stockholders."
The Las Vegas company also disclosed that it had requested that Okada resign from its board, but that he refused to do so.
Wynn Resorts said that shareholders of record on March 30 will be allowed to vote at the meeting. The date has not been set yet. It would take a vote of at least two-thirds of shareholders to remove Okada from the board.
Okada has already been removed from the boards of subsidiaries Wynn Macau Ltd. and Wynn Las Vegas Capital Corp.
Wynn Resorts said last month its investigation, which was led by a former FBI director Louis Freeh, found more than three dozen instances over a three-year period in which Okada and his associates engaged in "improper activities for their own benefit."
That included cash payments and gifts totaling about $110,000 to foreign gaming regulators, the company said. Wynn Resorts said the actions were in violation of U.S. anti-corruption law.
The investigation, also found Okada and his associates consciously took actions to conceal "the nature and amount of these payments," Wynn Resorts said.
Based on the report, Wynn Resorts said its board found that Okada is "unsuitable." The company's articles of incorporation provide for redemption at "fair value" of the shares held by unsuitable individuals. The shares were worth about $2.7 billion in mid-February and Wynn Resorts said it would buy them back for about $1.9 billion.
Okada has said that he's invested $380 million in Wynn Resorts since 2000. In January he sued Wynn Resorts in Nevada state court over a pledge by the company to donate $135 million to the University of Macau over 10 years.