Jilted Wynn Resorts board member Kazuo Okada continues his assault on company chairman and CEO Steve Wynn in a letter to fellow shareholders and forwarding two names for nomination as board members at the annual shareholder meeting in November.
In a letter filed Monday with the Securities and Exchange Commission and circulated widely by a major public relations firm, Okada excoriates Wynn’s management style and nominates Yale Law School professor Jonathan R. Macey and former CBS Corp. Executive Vice President and Chief Financial Officer Fredric G. Reynolds to the Wynn Resorts board.
Okada’s letter says the value of Wynn Resorts stock has “plummeted almost 30 percent” in the last year. He goes to great lengths to slam Wynn’s decision to make a “suspicious $135 million donation to the University of Macau Development Foundation."
Okada: “In April 2011, the Board met, discussed, and approved a pledge by Wynn Macau, Limited (“Wynn Macau”), a subsidiary of the Company, to donate HK$1 billion (roughly $135 million) to the University of Macau Development Foundation, at a time when Wynn Macau was seeking local government approval to develop a third casino. This donation is suspicious for a number of reasons, including its enormous size, the fact that the 10-year term of the pledge matches precisely the length of the casino license Wynn Resorts was seeking, and the fact that the lead trustee of the University of Macau Development Foundation also has a position in the Macau government which enables him to influence the issuance of gaming licenses.
“Mr. Okada questioned and objected to the donation and was ultimately the sole director to vote against it. Mr. Okada has noted that ‘I am at a complete loss as to the business justification for the donation, other than that it was an attempt to curry favor with those that have ultimate authority for issuing gaming licenses.’
“Following the April 2011 board meeting, pursuant to his rights as a director of the Company and in furtherance of his fiduciary duties to stockholders of the Company, Mr. Okada, sought to further investigate the Wynn Macau donation and requested additional information from Wynn Resorts concerning the donation and related matters. When the Company refused to provide the information, Mr. Okada took legal action and was vindicated by a court order requiring Wynn Resorts to comply with Mr. Okada’s reasonable requests.
“As Mr. Okada feared, the questionable Wynn Macau donation has already spawned at least four stockholder lawsuits against the Company and investigations by both the United States Securities and Exchange Commission (for possible violations of law including the Foreign Corrupt Practices Act) and the Nevada Gaming Board. Not only is this enormous financial commitment a drain on the Company’s coffers, but now Wynn Resorts stockholders will be saddled with the added costs associated with responding to the regulatory investigations and lawsuits. If the results of these investigations and lawsuits include the development of facts regarding legally questionable practices by the Company, stockholders will be at still further risk.”
Much of the Okada letter addresses issues that already have made headlines.
In June, Wynn Resorts released a statement noting the reusing of old complaints and allegations: "Mr. Okada is recycling previous baseless allegations in the press, while continuing to interfere with the judicial process by refusing to accept service of court documents.”