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Wynn: Okada's denial is an admission of wrongdoing
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The Associated Press File
Wynn Resorts of Las Vegas, led by Steve Wynn, will pay Kazuo Okada, at left, $1.9 billion over 10 years for his 20 percent stake in the gaming company, held by Okada's company Aruze USA Inc. Okada's stake is worth an estimated $2.77 billion. Wynn and Okada are seen together in 2004 in Carson City.
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LAS VEGAS REVIEW-JOURNAL
Wynn Resorts Ltd. CEO Steve Wynn escalated his dispute with his former business partner and ex-company vice-chairman Kazuo Okada on Monday, accusing the Japanese billionaire of trying to divert attention from his "misdeeds."
"What is remarkable in the Universal Entertainment response is that they do not deny violating the Foreign Corrupt Practices Act or otherwise contradict the company's statement," Wynn Resorts said in a statement.
Wynn Resorts said Sunday it had bought out Okada's stake after determining the Hong Kong-based casino tycoon and his associates made improper payments to overseas gaming regulators. It also asked him to resign from the Wynn Resorts board of directors.
In another move to distance itself from Okada, the upscale Okada Japanese restaurant adjacent to the entrance to the Tryst nightclub at Wynn Las Vegas was closed -- Wynn Resorts won't say when -- and all traces of the Okada name have been removed. A sign posted there said that the space is being renovated.
While references to the restaurant named for Wynn's longtime business partner have been scrubbed from the resort's website, Okada was still listed as a director of Wynn Resorts on the corporate website on Monday.
Okada's company, Universal Entertainment Corp., called the move to seize his 24 million shares "outrageous" and said more oversight of the Wynn Resorts board of directors is needed. It also indicated that Okada will fight the move.
"Universal Entertainment will take all legal actions necessary to protect its investment and prevent a forced redemption of its shares," the Tokyo-based gaming company said in a statement.
While Wynn's move against Okada is limited to his investment in Wynn Resorts, it could prompt an examination of Okada's subsidiary, Aruze USA Inc., a slot machine manufacturer licensed in Nevada since 2004.
State regulators had no comment on the allegations on Monday.
"We will conduct our own investigations and come to our own conclusions," said Mark Lipparelli, chairman of the Nevada Gaming Control Board.
Wynn Resorts has scheduled a conference call for analysts and the media for 6 a.m. today to address the acrimony between the one-time friends and business partners.
The dispute began last month when Okada sued Wynn Resorts in Nevada state court, seeking access to records associated with Wynn's $135 million pledge to the University of Macau Development Foundation. Wynn Resorts has said the dispute stemmed from Okada's decision to compete against Wynn's Macau properties by building a $2 billion resort in Manila Bay.
Bloomberg News reported Okada visited the office of the Philippine Amusement and Gaming Corp., a regulatory body, in Manila on Monday and denied giving cash to officials. Doing so would violate the U.S. Foreign Corrupt Practices Act, which prohibits companies from paying bribes in doing business overseas.
Okada told PAGC Chairman Cristino Naguiat that $110,000 in gifts to officials there, cited by Wynn Resorts in ousting Okada, were "complimentary accommodations" granted to his business associates from the Philippines and other countries from 2008 to 2011. Okada also apologized to Naguiat because he and his staff have been dragged into the ongoing dispute, Bloomberg reported.
Universal Entertainment holds almost 20 percent of Wynn Resorts' shares through Aruze
The shares are worth about $2.7 billion, but Wynn Resorts said it would pay Okada $1.9 billion, 30 percent less than current value, for his shares over the next decade.
Wynn Resorts said Sunday that its articles of incorporation allow it to forcibly buy back shares in such cases.
"Over the course of an extremely thorough year-long investigation, Mr. Okada has had numerous opportunities to explain his actions and provide evidence to refute the allegations," Wynn Resorts said Monday in a statement. "He never did so."
Rather, the company contends, Okada chose to attack Wynn Resorts' board.
"In light of the report and its findings, the company needed to act swiftly to take the necessary steps to protect stockholders and the company's gaming licenses from the actions of Mr. Okada and his affiliates," Wynn Resorts said.
Universal Entertainment shares dropped 20.88 percent Monday to $19.30, or 1,516.00 yen, per share in Tokyo. Wynn Macau Ltd. rose 3 percent to close at $2.69, or HK $20.90, in Hong Kong.
U.S. markets were closed Monday for the Presidents Day holiday. Wynn Resorts shares are expected to open today at $112.69 on the Nasdaq Global Select Market.
"We would not be surprised to hear investors question whether this dispute, as it continues to get uglier, will further raise the antennas of gaming regulators in both Macau and Nevada," said Carlo Santarelli, an analyst with Deutsche Bank.
Santarelli said he thinks Wynn Resorts has "acted prudently and responsibly in self-policing, and as such, is largely isolated from punitive damages stemming from potential back and forth accusations and a potential broader investigation."
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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A 135 million dollar gift out of the goodness of his black heart, hilarious. I'm sure Wynn didn't expect to receive any preferential treatment. After all their is nothing wrong with giving back to the community that raised you, oh I forgot, he's from here. Never mind. I guess UNLV is doing great financially and Steve would prefer to help the less fortunate in a foreign country.
Page 3.........Based on FreeH Report, presented to the Wynn Resorts Board of Directors on February 18, 2012, the Board determined that Azure USA, Inc. Universal Entertainment Corporation and Mr. Okada "unsuitable" under the provision of the Company Articles of Incorporation. The Board was unanimous (other than Mr. O kada) in its determination. The Board has requested that Mr. Okada resign a Director of Wynn Resorts. The Company will immediately inform the Board of Directors of its Hon Kong listed subsidiary, Wynn Macau, Limited of its action and will recommend that Mr. Okada be removed from the Wynn Macau Board. ..... Pursuant to the finding of "unsuitability" the Boars has redeemed Azure USA, Inc.'s 24 million' Wynn Resort shares. The terms of redemption are outlined in Wynn Resort's Articles of incorporation which have been in .....
There are more about fair value and explainings.
Page 2..... The Compliance Committee, chaired by former Nevada Governor Robert Miller, engaged several investigators including Fleeh, Sparkin and Sullivan, LLP, led by Louis J. Fleeh, the former Director of Federal Bureau of Investigation which conducted a thorough independent investigation. Fleeh's investigation uncovered and documents associates engage in apparent violation of U.S. Anti-Corruption Laws and gross disregard for the Company's Code of 'conduct. These troubling discoveries included payments and gifts totaling approximately $110,000 to foreign game regulators. Mr. Okada and his associates appear to have engaged in a long standing practice of making payments and gifts to his two chief game regulators at the Philippines Amusement and Gaming Corporation (PAGCOR), who directly oversees and regulates Mr. Okada's Provisional Licensing Agreement to operate in that country, "according to the Feeh report. The report further stated that Mr. Okada and his associates have "Consciously taken active measures to both the nature and amount of these payments."
Page 1::::::These are just copies. None are my opinions. I will mistype of misspell. .,.... Wynn Resorts Board Concludes Year Long Investigation of Kazuo Okada after Freeh Report Detailing Numerous Apparent Violation of U.S. Anti-Corruption Laws ......... Board finds Okada controlled Entity "unsuitable" Las Vegas Feb. 19, 2012 (Business Wire) Board redeems Okada's 20 % stake Pursuant to Company's Article of Incorporation ...... Wynn Resorts, Limited Wynn + 6.66% today announced that its Compliance Committee has concluded a year long investigation after receiving an independent report detailing numerous apparent violations of the U.S. Foreign corrupt Practices Act (FCPA) by Azure USA, Inc., its parent company, Universal Entertainment Corporation (jasdag code 6425) and its principal shareholder, Kazuo Okada. Mr. Okadais a director of Wynn Resorts, Limited and of Wynn Macau, Limited, a majority owned subsidiary of the Company
I got this info from Mr. Smith's Article. Philippines gaming regulator denies receiving Okada 'gift' or 'money'. (Investigative report created by FORMER FBI Director LOUIS FREEH) (... violate 'ANTI-CORRUPTION LAW' whatever it is)... This report is the basis of Wynn's accusation of Okada. We will see details in Mr. Smith's columns tomorrow. We know FOREIGN CORRUPTION-ACT exists. Wynn should hire someone a little bit smarter than FREEH so that he will not be a money giving sucker. Please check what kind of sloppy works he did for on-line poker, etc movements. Mr. Wynn should hire win-type attorneys than OJ Simpson's attornneys who won because judge and prosecution attorneys lost case becuase of their rushed job.
Wynn's $135 million pledge to the University of Macau Development Foundation smells pretty fishy. The rest is smokescreen to deflect attention from that.
It seems that Mr. Okada fished Mr. Wynn. After Mr. Wynn opposed to expand to Philippines, he stayed in Asia and bribed Philippines. Someone tutored him about Foreign Corruption Act? Mr. Okada is not US Citizen. Universal Entertainment is Japanese company. Japanese love to eat fish. They fish in Pacific Ocean. Mr. Wynn is easier to hook than whales in Australia. Now, OJ Simpson's attorneys with Mr. Wynn, I want to see how Mr. Wynn can escape from Japanese expert Nottori-ya.
If Okada's $110,000 in "gifts" is a bribe then Wynn's $135 MILLION pledge to the University of Macau Development Foundation is a much larger bribe... One done by a U S citizen to a foreign government.
No, everyone, Mr. Wynn knew all along the type of partner he had picked to sit at the Monarch's throne; it is just Okada is now in his way, and Mr. Wynn no longer needs his money or his influence. This whole story should be an embarrassment to the Nevada Gaming Control Board and the Nevada Gaming Commission. But, oh yes, I almost forgot, it is people like Mr. Wynn who put these officials in their respective jobs through campaign contributions.
Is Wynn saying he exercised poor judgement in picking a business partner? Sounds more strange behavior on the part of a petty tyrant.