| June 19
June 19 Japan's Universal Entertainment Corp
said on Monday that an internal investigation uncovered
$2 million in improper transfers of company funds by Chairman
Kazuo Okada, a disclosure that followed its claim earlier this
month of an improper $17 million loan that benefited Okada.
Okada could not be reached for comment. David Krakoff, a
lawyer for Okada in an unrelated legal case in the United
States, did not respond to a request for comment.
Universal previously disclosed that Okada, who founded the
company five decades ago and built it into one of Japan's
largest makers of slot and pachinko gambling machines, would
not be reappointed as a director when shareholders vote on board
members later this month.
Okada has played a leading role in developing, managing and
promoting a $2.4 billion casino resort that Universal opened in
Manila this year. Universal has said it does not believe the
investigation will impact its business.
The statement issued on the company's website on Monday said
that the company had found that a wholly owned subsidiary of
Universal in South Korea, Universal Entertainment Korea Co.,
Ltd, had disbursed $170,000 related to a $80 million loan taken
out by Okada Holdings Ltd for a land transaction in 2014.
Okada Holdings, which is controlled by Okada and his
relatives, is majority owner of Universal Entertainment.
The amount disbursed was equal to interest owed on the loan
that should have been paid by Okada Holdings rather than the
Universal subsidiary in South Korea, Universal said.
The company also said on Monday that it found Okada had in
March 2015 withdrawn HK$16 million ($2.05 million) from a bank
account of Tiger Resort Asia Limited (TRA), a Hong Kong
subsidiary of Universal in which Okada was the sole director at
Universal said in the statement that both transactions were
carried out without the necessary internal procedures and may
constitute a "serious violation of governance."
In a statement on its website on June 8, Universal said it
had found potential problems related to a HK$135 million ($17.31
million)loan from TRA in 2015 to an unnamed third party. Nearly
all of that amount was subsequently transferred to Okada
Holdings Ltd with the objective of personally benefiting Okada,
the company said.
Separate from the recent allegations, Okada and his
companies have been under investigation by the Federal Bureau of
Investigation over a $40 million payment to a Manila-based
consultant in 2010. The FBI's probe is focused on whether the
payment was aimed at helping Universal gain tax and ownership
concessions for the casino from the Philippine government,
according to people with knowledge of the matter.
Universal and Okada have denied any wrongdoing and filed a
defamation lawsuit against Reuters in 2012 for its reporting on
the payments. The Tokyo District Court ruled in 2015 that
Universal's case was without merit. Last year the Tokyo High
Court upheld that ruling, dismissing Universal's appeal.
Universal has appealed to the Supreme Court of Japan.
($1 = 7.7996 Hong Kong dollars)
(reporting by Nathan Layne in New York, Emi Emoto in Tokyo and
Farah Master in Hong Kong; Editing by Amy Stevens and Cynthia