* Once Wynn's "best friend," Okada alleges fraud
* Pachinko tycoon wants shareholder rights restored
* Okada remains on Wynn Resorts board of directors for now
LOS ANGELES/HONG KONG, June 15 Japanese pachinko
tycoon Kazuo Okada has escalated his legal battle against Las
Vegas mogul Steve Wynn, seeking a preliminary injunction to
protect his stake in Wynn Resorts, the latest blow
between the two billionaires who were partners for more than a
Okada asked a federal judge in Nevada on Thursday to
immediately restore the rights of his Universal Entertainment
Corp. subsidiary, Aruze USA, as the largest
shareholder of Wynn Resorts. Okada also filed an amended
counterclaim against Wynn, th e company's general counsel and
individual board members.
In a response to the motion, Wynn Resorts issued the
following statement: "Mr. Okada is recycling his previous
baseless allegations in the press, while continuing to interfere
with the judicial process by refusing to accept service of court
"The facts clearly justify the carefully considered actions
taken by the Wynn Board to redeem an unsuitable shareholder in
order to protect the company and its shareholders," Wynn said.
Okada, whom Wynn once called his "best friend" and who
helped bankroll Wynn's casino empire starting in 2000, has been
fighting to claw back his 20 percent stake in Wynn Resorts that
Wynn forcibly bought back at a steep discount after producing a
report that said Okada had engaged in "improper" activities.
The battle that erupted in January when Okada sued Wynn for
denying him access to key financial documents has thrown a harsh
spotlight on corporate governance in the gambling industry at a
time when casinos are mushrooming throughout Asia.
Until Feb. 20, Okada held the largest single stake in Wynn
Resorts despite being ousted from Wynn's Macau unit Wynn Macau
on Feb. 24. He remains a member of the board at Wynn.
The latest filing is also an attempt to head off efforts to
oust Okada from the board. Wynn has already filed a preliminary
proxy statement announcing that a special stockholder meeting
will be held for the sole purpose of removing Okada. No date has
been set, but the company is allowed to call such a meeting with
10 days' notice.
Okada, chairman of Universal Entertainment, said in the
filing that Wynn "indulged in fraud, deception, theft and
betrayal to maintain control of his gaming enterprises."
Detailed in a 106-page amended counterclaim, Okada said "in
the course of trying to illegally force out Aruze USA as Wynn
Resorts largest stockholder, Mr. Wynn and Wynn resorts' General
Counsel Kimmarie Sinatra committed a series of predicate acts of
racketeering, which include fraud, acquiring property under
false pretenses, acquiring signatures under false pretenses and
other similar wrongful activities."
"This motion for preliminary injunction and our amended
counterclaim seeks to protect our investment and restore
independent judgment and sound corporate governance to the Wynn
Resorts Board," Universal Entertainment and Aruze USA said in a
statement accompanying the legal filings.
A Wynn spokesperson was not available to comment.
"PAYING FOR BENEFITS"
Okada, who made his riches in pachinko, a mix between slots
and pinball that rakes in about 20 trillion yen ($250 billion)
annually, is building his own casino in the Philippines. Wynn,
known for building premium casinos like the Bellagio and Mirage
in Las Vegas, said Okada went against a Wynn board decision by
developing the property, making Okada a direct competitor.
Okada is also setting up a string of fine-dining restaurants
in Asia and is in negotiations to build a casino resort in South
Korea. Trained as an engineer, he had not previously ventured
into developing leisure properties.
Wynn is adding to his properties in Macau by building a $4
billion casino in the world's largest gambling destination.
Okada alleges in the filing that Wynn has failed to explain
how a $30 million payment related to Macau was spent and said a
$135 million donation to the University of Macau Development
Foundation by Wynn could be construed as "paying for benefits"
because the date of the donation and the term of Wynn Macau's
gaming license in Macau coincide.
A report commissioned by Wynn last year that claimed Okada
made improper payments to obtain his Philippine casino license,
which could threaten Wynn's own licenses, did not show anything
that "could pose a legitimate and imminent danger to Wynn
Resorts' gaming licenses," Okada's filing said.
Wynn had also communicated to Okada through intermediaries a
few days prior to redeeming Okada's shares that he would be
willing to buy the stock at a significant discount.
The filing says Okada disagreed and his shares were then
redeemed at a 30 percent discount. The calculation for the
discount was done by Moelis & Company whose founder has a long
history with Wynn.