Seems maybe Wynn was viewing Okada as future Macau competition and didn't like the relationship building on their dime? This will get crazy. I got very short WYNN on the pop up yesterday.
Wynn Resorts Ltd. accused Japanese billionaire Kazuo Okada of putting up a Philippines gaming regulator in a $6,000-a-day suite in Macau as part of a series of payments that the company said appear to have violated U.S. anti-bribery law.
Okada’s Universal Entertainment Corp. improperly gave more than $110,000 in payments and gifts to two chief gambling regulators in the Philippines and their families, according to a report prepared for Wynn Resorts and filed Feb. 19 with a lawsuit against Okada in state court in Nevada.
Okada, his associates and companies made three dozen improper payments, including a four-day stay by a Filipino regulator, Cristino Naguiat Jr., in the most expensive room at Wynn Resorts Macau, according to a report by Freeh Sporkin & Sullivan LLP. The room, known as Villa 81, covers 7,000 square feet, the report said.
“Naguiat’s luxury stays at Wynn Resorts facilities were fully known to Mr. Okada, who actively involved himself in some of the arrangements,” according to the report, prepared by former Federal Bureau of Investigation director Louis Freeh.
Okada, who is developing a gaming business in the Philippines, has been asked to step down as a director of Las Vegas-based Wynn Resorts.
The casino company claims that Okada, Universal and a company controlled by Universal, Aruze USA Inc., breached their duty to Wynn. On Feb. 19, Wynn forcibly redeemed Universal’s 19.7 percent stake in the company at a discount, escalating a dispute between Chief Executive Officer Stephen Wynn and Okada, who helped bankroll the casino company.
Universal said in a statement yesterday that while it hadn’t been provided with a copy of the report, “we believe the allegations leveled against Universal are motivated by self- interest and represent the results of an incomplete and otherwise flawed corporate governance process.”
Universal said Aruze USA would seek a court order to prevent the redemption of the shares.
Okada visited the office of regulator Philippine Amusement and Gaming Corp., or PAGCOR, in Manila on Feb. 20 and denied making cash gifts, the regulator said in an e-mailed statement.
Okada told Naguiat, PAGCOR’s chairman, that the $110,000 in gifts detailed in the report were “complimentary accommodations” granted to Okada’s business associates from the Philippines and other countries from 2008 to 2011, according to the statement. The billionaire also apologized to the regulator for including the agency and its officials in the dispute, it said.
There was “nothing inappropriate” about the accommodations, Naguiat said in a phone interview. “It is industry practice that if there are casino executives in town, we offer cars, security and rooms as a courtesy, as a form of reciprocity. This practice also happens in the airline industry.”
The 47-page Wynn report concludes that Okada, his company and associates “appear to have engaged” in violations of the U.S. Foreign Corrupt Practices Act in the Philippines and may also have done so in South Korea. The FCPA bars corrupt payments to government officials for obtaining or retaining business.
“Based upon a multi-month investigation -- which culminated with a personal interview that Okada long evaded -- Freeh uncovered substantial evidence of gross improprieties by Okada and his agents,” Wynn Resorts said in its breach-of- fiduciary-duty complaint.
Since 2008, Okada and his associates have procured land and a provisional gaming license to create an establishment known as Entertainment City Manila. Okada is the chairman of Tokyo-based Universal.
Wynn Resorts set up an account funded by deposits from Okada or his company for “billing conveniences related to charges at various Wynn Resorts locales,” according to the Freeh report.
The report details 36 charges between May 2008 and June 2011 when Okada, his associates and companies made payments that “directly benefited senior PAGCOR officials, including two chairmen and their family members.” One payment, for $4,642, benefited Jose Miguel “Mike” Arroyo, the husband of former Philippines President Gloria Arroyo, according to the report.
Freeh’s report details the September 2010 visit of Naguiat, his wife, three children, nanny and other PAGCOR officials to Wynn Resorts Macau. Naguiat was registered as “Incognito,” which Freeh’s report said was “an attempt to hide the payment of extremely costly expenses by a corporation connected with a regulated entity.”
Okada’s associates obtained $20,000 from the resort’s cash cage as advances for Naguiat and his family, according to the report. Okada also hosted a dinner at Wynn Macau for Naguiat and about 13 others, charging the $1,673 to Okada’s room.
Naguiat said he had one dinner with Okada and the rest with other casino executives whom he didn’t name.
“I never received $20,000; we didn’t receive any cash,” he said. “I was told that the amount wasn’t supposed to be charged to our rooms. It was a mischarge.”
The report details a Wynn Resorts board meeting in February 2011, when Okada said words to the effect of “in Asia, it is okay to give gifts to government officials,” and “I wouldn’t bribe someone but would have someone else bribe that person.”
In a Feb. 15 interview with Freeh’s investigators, Okada denied making those statements. He admitted meeting with Naguiat during his Wynn Macau stay and said they “did not discuss any business at the dinner which would have been rude,” according to the report.
Okada was never told the cost of Naguiat’s stay, “nor did he ask anybody that question,” according to the report. He also said one employee was fired and another resigned after a scolding as a result of the stay.
The evidence about the stay, Freeh concluded, “cast substantial doubt on Mr. Okada’s credibility.” His various actions also gave the Wynn Resorts board “a factual basis to review Mr. Okada’s continued suitability to be a major shareholder and director,” according to the report.
Last month, Okada sued Wynn Resorts in state court in Nevada to force the company to produce spending records. That case is pending. Okada opposed Wynn Resorts’ HK$1 billion ($129 million) pledge in July 2011 to the University of Macau Development Foundation.
Wynn Resorts has said the dispute 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. The company said that it will recommend that he be dropped from the board of Wynn Macau as well.
The U.S. Securities and Exchange Commission has requested information about Wynn’s donation to the university foundation. Wynn was asked in an informal inquiry by the SEC’s Salt Lake City office on Feb. 8 to preserve information about the commitment, the company said in a Feb. 13 regulatory filing.
Wynn Resorts said in a statement that to protect the company’s gambling licenses, it may redeem shares for “fair value” from a person found “unsuitable” under its articles of incorporation. An independent financial consultant helped calculate the fair value, and Okada’s stake was redeemed at a discount because of restrictions on the shares, Wynn said in the statement.
“Okada had made unlawful payments to foreign gaming regulators who could advance Okada’s business interests,” Wynn alleged in its complaint. “Okada surreptitiously undertook these acts despite admonishments that all directors closely adhere to company policy.”
Wynn climbed 6 percent to $119.40 yesterday in Nasdaq Stock Market trading. Universal Entertainment plunged the daily maximum of 21 percent in Tokyo on Feb. 20, the first trading day after Wynn filed its lawsuit.
when man determined to destroy himself he picked the was of shall and finding only why smashed it into because."
— E.E. Cummings