Kazuo Okada, co-founder and one-time largest shareholder in Wynn Resorts Ltd., resigned Thursday from the gaming company’s board of directors, just one day before a shareholder vote likely would have removed him.
“I no longer believe it is appropriate for me to serve on the board of directors of a company that is behaving in a manner that I deeply believe to be unethical, and that has refused my reasonable requests to promptly investigate what appears to me to be misconduct by Steve Wynn, and thus is under the dictatorship of Mr. Wynn and fails to fulfill its original function,” Okada said in a six-page letter announcing his resignation to shareholders and media.
Okada, chairman of Tokyo-based Universal Entertainment Corp., said he will still fight Wynn Resorts’ involuntary redemption of his nearly 20 percent ownership. The Las Vegas-based company seized Okada’s shares at a 30 percent discount last year, giving the Japanese billionaire a 10-year promissory note valued at $1.9 billion.
Okada said his resignation from the board “will not impede me from protecting my good name and reputation as Universal and Aruze USA forcefully prosecute the claims made against Wynn Resorts in Nevada State Court.”
Okada and Aruze USA, a subsidiary of Universal Entertainment, invested $260 million in November 2000 for a 50 percent stake in Valvino Lamore LLC, the predecessor to Wynn Resorts.
The fight between the former business partners began when Okada questioned a $135 million donation Wynn Resorts made to the University of Macau Development Foundation.
That was followed by an internal investigation by Wynn Resorts and allegations that Okada’s company, Universal, had violated U.S. anti-corruption laws through payments it had made to gaming regulators in the Philippines.
Wynn Resorts shares fell $1.03, or 0.88 percent, to $115.53 Thursday on the Nasdaq Global Select Market.
A Wynn Resorts’ statement Thursday said preliminary results received so far show that 99.7 percent of early shareholder votes favored Okada’s removal.
The company will hold its special shareholder meeting as planned today , according to the statement.
“We greatly appreciate the overwhelming support from our stockholders for this important action to protect the company’s business and the interests of stockholders,” said Wynn, the 71-year-old company CEO and chairman, in the statement.
He said the preliminary vote count “clearly illustrates that our stockholders understand that removing an unsuitable person from the board is vital to the continuing success of the company.”
Okada, 70, failed last week to have a federal judge in Las Vegas halt today’s special shareholder meeting. Wynn Resort shareholders will also vote today on a proposal to reduce the company’s board from 12 to eight directors, including six independent directors.
In 2011, Okada was removed as a director of Wynn Macau Ltd., a subsidiary of Wynn Resorts, which operates Wynn Las Vegas and Encore on the Strip, and Wynn Macau. The company recently began building a $3.5 billion property in Cotai.
Wynn and his ex-wife Elaine control more than 18 percent of the company after Okada’s shares were redeemed.
Okada said in his letter that he will continue to focus his efforts on managing Universal.
And he reminded Wynn that he supported him “during some of his darkest days” and helped get the company off the ground, and also that he invested another $120 million as it entered Macau:
“When Mr. Wynn needed my money, I was more than good enough for him and the company.”
Contact reporter Chris Sieroty at csieroty@reviewjournal .com or 702-477-3893. Follow @sierotyfeatures on Twitter.