Judge asks Wynn to review Okada dispute

A US judge asked gaming operator Wynn Resorts to reconsider the request of Japanese pachinko tycoon Kazuo Okada for access to financial records

Japanese tycoon Kazuo Okada scored a small victory in his dispute with Wynn Resorts over the use of funds, which include a donation to the University of Macau, after a US judge asked the gaming operator to reconsider Okada’s request for access to financial records.
Okada, a former Wynn vice-chairman, must wait until February 23 to find out whether or not he may see the casino operator’s financial records, a Las Vegas judge ruled, saying she needs more time to go over the document requests in detail.
Nevada state court judge Elizabeth Gonzales said at the conclusion of a hearing that she will review Okada’s requests before determining which ones are reasonable.
“The company has a right to determine each document individually,” Gonzales said, quoted by Bloomberg. She said that a director’s right to review company books is limited under Nevada law.
Gonzales “did not grant Mr. Okada’s request for relief but she did ask us to reconsider the request,” Robert Shapiro, a lawyer for Wynn Resorts, told reporters after the hearing. “We will go to the board of directors and get back to Judge Gonzales in two weeks.”
Okada, who was removed as vice chairman in October, sued Wynn Resorts in state court in Nevada to force the company to produce spending records. Okada, who is chairman of Universal Entertainment, Wynn Resorts’ largest shareholder, has USD 380 million invested in the casino operator dating back to 2000, according to regulatory filings.

Corporate governance

Kirk Lenhard, an attorney for Wynn Resorts, argued that Okada’s request was premature as such actions should be brought before the board of directors. The board should be allowed to review the request at a meeting next month before the court rules, Lenhard said.
Gidon Caine, an attorney for Okada, said the request was about “good corporate governance.”
“We’re encouraged that the court saw Mr. Okada’s role as a fiduciary as important,” Caine said after the hearing.
Okada’s Aruze USA Inc. said in an e-mailed statement to Bloomberg that the company looks forward to working with Wynn Resorts to gain access to the books and records.
Okada opposed Wynn Resorts’ HKD 1 billion pledge in July 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 donating MOP 80 million to UMDF every year until 2022, the same year when its gaming license comes up for renewal.
Okada hinted that the pledge was an attempt to ensure the license is renewed.
Wynn Resorts said last month that the dispute with Okada stemmed from Okada’s decision to compete by pursuing projects in the Philippines. Okada was removed as vice chairman after admonishments from the board over the plan, Wynn Resorts said.
In court today, Lenhard said that Okada was using his position as a director as a ruse to see Wynn Resorts’ books. Universal, a Tokyo-based pachinko-machine maker, owns a 20 percent stake in the company.