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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Universal files criminal complaint against Wynn in Philippines

14 December 2012

Universal Entertainment Corporation said Thursday it had filed a criminal complaint in the Philippines against Wynn Resorts, Limited Chairman and CEO Steve Wynn, accusing the Las Vegas-based casino developer of libel over allegations of improper payments.

In a statement, Universal said it had filed the complaint through Tiger Resorts Leisure and Entertainment Inc., a subsidiary in the Philippines. The company has been granted a provisional gaming license to build a $2.3 billion casino on Manila Bay.

Kazuo Okada is chairman of Tokyo-based Universal, which also owns Aruze USA, a slot machine manufacturer licensed in Nevada since 2004.

Wynn Resorts dismissed Okada's libel suit as "baseless."

"This ridiculous and spurious action is just the latest baseless threat in Mr. Okada's increasingly desperate campaign to divert public attention from his deepening legal troubles in multiple jurisdictions," Wynn Resorts said in a statement Thursday.

Universal's complaint relates to allegations made in an internal report conducted by former FBI director Louis Freeh. The 47-page Freeh Report alleged that Universal had violated U.S. anti-corruption laws through payments it had made to gaming regulators in the Philippines.

The report led to Wynn Resorts in February seizing Okada's nearly 20 percent stake in the gaming company.

Okada and Aruze USA invested $260 million in November 2000 for a 50 percent stake in Valvino Lamore LLC, the predecessor to Wynn Resorts. Earlier this year, Okada was removed as a director of Wynn Macau Ltd., a Macau subsidiary of Wynn Resorts, but he remains a director on the Wynn Resorts board of directors.

The complaint is another twist in the nearly yearlong dispute between the two former business partners. Both Wynn and Okada have sued each other in Nevada, and Okada filed a $143 million defamation lawsuit in Japan.

The lawsuit filed in August in Tokyo claims Wynn Resorts and Wynn damaged Okada's image, cost him potential business and caused Universal Entertainment stock to drop.

"The (FBI) investigation was clearly an afterthought and was commissioned for the purpose of providing justification for the baseless findings of the Compliance Committee," Universal said in a statement.

Universal said Okada was removed as a Wynn Resorts shareholder because he objected to the company's $135 million donation to the University of Macau Development Foundation, which was announced last year.

Shares of Wynn Resorts gained 76 cents, or 0.67 percent, to close Thursday at $114.22.

While Okada and Wynn feud, Universal confirmed Thursday it had signed a preliminary agreement with Robinsons Land Corp. to partner in its Manila casino project.

The Philippines has said it will cancel Okada's license if the bribery charges are proven.

The final contract will be signed Jan. 13, according to Universal. Robinsons Land will be in charge of the development of commercial facilities, hotels and housing for the project.

Okada originally approached Wynn Resorts about a partnership in the Philippines, an offer the gaming company turned down.

Separately on Thursday, Wynn Resorts announced in a statement it is streamlining its board of directors and increasing the percentage of independent directors as it pursues a growth strategy to expand into new jurisdictions.

The company, which had a 12-member board including seven independent directors, has reduced the Board to nine members, including six independent directors, it said in a statement

In the statement, Wynn Resorts also announced it is calling a special meeting of stockholders to vote on a proposal to remove Okada as a director.
Universal files criminal complaint against Wynn in Philippines is republished from Online.CasinoCity.com.