Wynn to ‘vigorously’ fight Okada claims

Japanese tycoon Kazuo Okada sued Wynn Resorts to pressure the gaming operator into buying out his stake in order to develop casino resorts in Asia, analysts said

Gaming operator Wynn Resorts has pledged to “vigorously” challenge a lawsuit by former vice-chairman Kazuo Okada over the use of funds, which include a donation to the University of Macau.
According to Bloomberg, the Japanese tycoon filed the complaint in state court in the US State of Nevada, seeking to force the company to produce spending records. He is also chairman of Universal Entertainment, Wynn’s biggest shareholder.
But in response Wynn said the lawsuit was “preposterous and without merit” and merely attempted to deflect attention from Okada’s decision to compete with the company by pursuing a project in the Philippines.
Okada was removed as vice chairman in October after admonishments from the board over his plans to pursue the project, the Las Vegas-based casino operator said in a statement.
“The dispute also involves Mr Okada’s misuse of his director position to imply the company’s participation in projects that the company had made firm decisions to avoid,” Wynn stressed.
The 69-year-old might be trying to pressure Wynn into buying out his stake “to develop casino resorts in the Philippines (Manila) and South Korea (Incheon), in addition to what he may have in mind for casino development in Japan should legislation eventually pass,” Bill Lerner of Union Gaming Research wrote in a report quoted by South China Morning Post.

Pledge dispute

Okada opposed the company’s HKD 1 billion “unprecedented” pledge in July 2011 to the University of Macau Development Foundation (UMDF), according to the complaint.
In May last year Wynn Resorts’ local subsidiary, Wynn Macau, donated MOP 200 million to UMDF. The company has committed to donate MOP 80 million to UMDF every year until 2022.
“Mr Okada received the same information as all directors with respect to charitable contributions made by the company,” Wynn said.
Universal, a Tokyo-based pachinko machine maker, owns a 20 percent stake in Wynn Resorts, which also controls local casino Wynn Macau.
Okada said in a related regulatory filing he is seeking to protect his investments of USD 380 million (MOP 3 billion) in Wynn Resorts dating back to 2000.
According to the filings, last November Okada sought information regarding the pledge, the use of USD 30 million (MOP 240 million) one of his companies invested in Wynn in April 2002 and an amendment to a stockholders agreement with chairman and founder Stephen Wynn and ex-wife Elaine Wynn that followed the couple’s divorce.
“Not only was the request summarily denied but, shockingly, Wynn Resorts asked for evidence that the USD 30 million investment had even occurred,” according to the filing.
Okada, a Hong Kong resident, is one of Wynn Resorts’ original investors.