GAMING:

Okada plans legal showdown with Wynn over share redemption, bribery charges

AP Photo/Nevada Appeal, Cathleen Allison

Las Vegas casino mogul Steve Wynn, right, talks with Kazuo Okada during a Gaming Commission hearing Thursday, June 17, 2004, in Carson City, where Okada received approval for a license for his Japanese Aruze Corporation to manufacture and sell slot machines in Nevada.

Source: Wynn probe of Okada covers S. Korea, Filipino regulators

The Wynn Resorts’ investigation of board member Kazuo Okada disclosed Sunday suggests his conduct in Las Vegas, South Korea and the Philippines caused alarm among his fellow board members.

The investigatory report by former FBI director Louis Freeh’s company hasn’t been made public, but a person who has seen it told the Sun and VEGAS INC on Sunday that it asserted these findings:



• Okada’s casino-resort development in the Philippines appears to have been arranged in violation of Filipino constitutional provisions requiring such projects to be 60 percent owned by Filipinos.



• During times when Okada was trying to arrange for development of the Philippines resort, he or his associates and companies covered expenses for Filipino regulators at both Wynn Las Vegas and Wynn Macau.



• Cristino Naguiat, the chief gaming regulator in the Philippines whose company is also

investing in the Okada resort there, visited Wynn Macau in September 2010 with his friends and associates. Okada and his associates tried unsuccessfully to have resort officials keep the visit incognito and also to cover some of the expenses of the visitors. Wynn learned of this because some of their expenses were covered by an Okada account at the resort. The purpose of the visit ostensibly was for Naguiat to learn more about the casino business.



• Okada, his associates or companies also may be linked to improper conduct involving a gaming official in South Korea, something that requires further investigation.



• The activities of Okada, his associates and companies "constitute a substantial ongoing risk to Wynn Resorts and to its board of directors."



• Okada, who was recently interviewed for the Freeh report, told investigators one employee had been fired and another resigned because of problems with his companies paying excessive amounts to cover some of the expenses of the gaming regulators.



• Okada denied saying he feels payments to casino regulators in Asia are appropriate and he recalls seeing the Wynn policy that all directors receive training in Foreign Corrupt Practices Act compliance. Okada told investigators he referred that policy directive to his attorneys.

Wynn Resorts Ltd. board member Kazuo Okada said late Sunday he wouldn't consent to Wynn's effort to redeem his shares in the Las Vegas-based company.

The billionaire Okada's company in Tokyo, Universal Entertainment Corp., issued a statement on the issue about 12 hours after Wynn Resorts issued its own statement outlining steps it was taking against Okada.

Wynn announced Sunday the company was buying Okada's shares in the company without Okada's consent at a discount for $1.9 billion, was suing him and had asked Okada to resign from the Wynn Resorts board. Wynn said it based its actions on a report by former FBI director Louis Freeh's company.

The Freeh report claims Okada made improper payments to foreign gaming regulators, allegedly threatening the business of Wynn Resorts, which must comply with a U.S. law barring bribes to foreign officials. That law is called the Foreign Corrupt Practices Act.

Okada signaled Sunday he would dispute those assertions, which appeared to be grounded in Okada's efforts to develop a gambling resort in the Philippines. Wynn, which has casinos in Las Vegas and Macau, China, believes the proposed Okada resort in the Philippines would be a competitor to Wynn.

"It is unfortunate that the Wynn Resorts Board of Directors has decided to operate as a `Star Chamber' and not like a board of a publicly-traded company, protecting the interests of its stockholders," the Universal Entertainment statement said. "The decision by the Wynn Board, which followed a rushed investigation that lacks absolute findings, to redeem Universal Entertainment’s nearly 20 percent holdings in Wynn Resorts based on its project in the Philippines is outrageous. We have not even been provided with the opportunity to review the Freeh Report. It is now more evident than ever that additional independent oversight is needed on the Wynn Resorts Board. Universal Entertainment will take all legal actions necessary to protect its investment and prevent a forced redemption of its shares."

With U.S. courts closed for the Presidents' Day holiday on Monday, it appeared any urgent legal action on the part of Okada would have to wait until Tuesday.

Wynn Resorts, in the meantime, on Monday issued a statement responding to Okada's "Star Chamber" statement.

"Mr. Okada's challenges to the board process are a desperate attempt 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 statements. 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. He never did so. Rather, Mr. Okada chose to attack the company's board and its process. In light of the Freeh 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," the statement said.

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