Wynn Vice Chairman Okada Sues to See Company’s Books in Spending Dispute
Wynn Resorts Ltd. (WYNN) Vice Chairman Kazuo Okada sued the casino operator for access to financial records in a dispute with the company over the use of funds.
Okada, 69, sued in state court in Clark County, Nevada, to force the company to produce spending records. He is chairman of Universal Entertainment Corp. (6425), Wynn’s biggest shareholder. Wynn Resorts said today that Okada was “removed” as vice chairman in October in a dispute over his development plans.
Okada opposed Wynn Resorts’ HK$1 billion ($129 million) pledge in July 2011 to the University of Macau Development Foundation, according to the complaint. Universal, a Tokyo-based pachinko machine maker, owns a 20 percent stake in the Las Vegas-based operator of casino resorts. Kazuma Ishioka, a spokesman at Tokyo-based Universal, declined to comment.
Okada said in a related regulatory filing that he is seeking to protect his investments of $380 million in Wynn Resorts dating back to 2000.
According to the filings, on Nov. 2 Okada sought information regarding the university pledge, the use of $30 million invested in Wynn by one of his companies 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 $30 million investment had even occurred,” according to the filing.
Competing Project
Wynn Resorts said the dispute stemmed from Okada’s decision to compete with the company by pursuing projects in the Philippines. Okada was removed as vice chairman after admonishments from the board over the plan, Wynn said today in an e-mailed statement. The company also claims Okada implied Wynn would participate “in projects that the company had made firm decisions to avoid.”
Okada’s lawsuit “is preposterous and without merit. The company will defend it vigorously,” Wynn said. Capital contribution information is public, and Okada had the same information about charitable donations as other directors, the company said.
Okada, a Hong Kong resident and Japanese citizen, is one of Wynn Resorts’ original investors. He is ranked the 26th-richest person in Japan in 2010, according to Forbes.
Casinos, Hotels
Universal Entertainment plans to make more money from operating casinos, Okada said in a Sept. 28 interview with Bloomberg News.
The maker of pinball-like machines used in pachinko parlors, where customers play for prizes that can be exchanged for cash, plans to open two casinos and three hotels in Manila, the Philippines, by December 2013 and will decide by 2015 whether to build more gambling venues in Asia.
Gamblers in Asia are fueling industry growth in Singapore and Macau, where casino revenue has more than tripled in the past four years. Casino revenue in Macau, the world’s largest gambling hub, jumped 42 percent to 268 billion patacas ($33.5 billion) last year, according to data from Macau’s Gaming Inspection and Coordination Bureau.
Wynn, owner of the namesake and Encore casinos, dropped 1.9 percent to $109.80 at the close New York. The shares gained 6.4 percent last year. Wynn Macau Ltd. (1128) fell 4.8 percent to HK$17.56 in Hong Kong.
The case is Kazuo Okada v. Wynn Resorts, Ltd., District Court of Clark County, Nevada (Las Vegas).
To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net; Vinicy Chan in Hong Kong at vchan91@bloomberg.net
To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net
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