Universal Entertainment Declines on Graft Allegations
Universal Entertainment Corp. (6425) fell to the lowest in more than two years in Tokyo trading after the Philippines said it was probing graft allegations and may cancel Chairman Kazuo Okada’s casino license if bribery was proven.
Universal dropped 11 percent to close at 1,499 yen, the lowest level since July 23, 2010. A Universal subsidiary made a $5 million payment to Rodolfo Soriano, an associate of Efraim Genuino, former chairman of the Philippine Amusement and Gaming Corp., Reuters reported Nov. 16. The Philippines’ Department of Justice is investigating bribery allegations and may cancel a license granted to Okada in the country, President Benigno Aquino’s spokesman Edwin Lacierda said today.
Universal, controlled by 70-year-old Japanese billionaire Okada, and former partner Wynn Resorts Ltd. (WYNN) Chairman Steve Wynn, also 70, are feuding over accusations of bribery. Shares of Universal, which is building a casino in the Philippines, have slumped 22 percent since Feb. 19, when Wynn accused Okada of making improper payments to gaming regulators in the Philippines, in possible violation of U.S. anti-bribery laws.
The Philippine Amusement and Gaming Corp., or Pagcor, will cooperate with both local and international authorities for the investigation, the gaming regulator said in a statement today.
Universal declined to comment on the Reuters report, said Nobuyuki Horiuchi, a spokesman at Japan’s biggest maker of pachinko machines. Ramon Esguerra, an attorney who has represented Genuino, wasn’t immediately available for comment. The number for the only Rodolfo Soriano listed in the Manila phone book generated an automatic message saying the number wasn’t accessible.
Soriano was formerly a consultant of Pagcor, according to the gaming regulator’s statement.
The Reuters report cited bank records, corporate filings, court documents and records prepared by Universal staff.
Wynn Resorts in February forcibly redeemed Okada’s 20 percent stake in the Las Vegas-based casino operator for a 10- year promissory note worth $1.9 billion, which Okada said was 30 percent less than the market value.
The board of Wynn Resorts redeemed Okada’s shares because his conduct created a threat to the casino operator’s “good standing with gaming regulators,” a Sept. 26 filing showed.
Okada said in court filings that Steve Wynn wanted to oust him because he questioned and voted against a $135 million donation to the University of Macau last year.
Okada helped Steve Wynn bankroll the casino company, which has resorts in Las Vegas and Macau, 12 years ago. In his counterclaims to Wynn Resorts’ lawsuit, Okada said Steve Wynn runs the business as a “personal fiefdom” and packs the board with “friends who do his personal bidding.” He seeks a court ruling in Nevada that the redemption of his shares is invalid.
Clark County District Judge Elizabeth Gonzalez in Las Vegas rejected a request by Wynn Resorts this month to dismiss the claims on grounds that Okada failed to support his allegation that directors breached their duty of care and loyalty. She threw out a racketeering claim by Okada against Steve Wynn, and Kim Sinatra, Wynn’s general counsel.
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