Report: Philippine leader orders inquiry of Okada, gaming regulator

Philippine President Benigno Aquino on Friday ordered an inquiry into the relationship between casino executive Kazuo Okada and the nation's top gaming regulators after the Japanese billionaire was removed as a nonexecutive director of Wynn Macau Ltd.

Aquino said a cabinet committee will investigate Philippine gambling regulator Cristino Naguiat, who allegedly received free hotel accommodations including a $6,000-a-day suite through Okada, Bloomberg News reported.

Naguiat "will be asked to explain himself," Aquino told reporters in Manila.

Naguiat earlier this week said he had done "nothing inappropriate," according to Bloomberg News.

Wynn Macau said Friday that its board had voted to immediately remove Okada less than a week after the board of the parent company Wynn Resorts Ltd. forcibly bought out his 20 percent stake.

A board decision to remove Okada was effective immediately, the company said in a filing with the Hong Kong Stock Exchange.

"The board considered the information disclosed by Wynn Resorts Ltd. concerning the independent report commissioned by the Compliance Committee of Wynn Resorts Ltd.," the nine-member Wynn Macau board of directors said in the filing.

"After due consideration of the independent report, taking into account the company's high ethical standards, the board determined that it was obligated to remove Mr. Okada, his employees and associates detailed in the independent report. Accordingly, the board resolved to remove Mr. Okada as a nonexecutive director of the company."

After deeming him "unsuitable" based on a yearlong investigation and according to company policies, Wynn Resorts bought out the Japanese billionaire's stake in Wynn Resorts at a 30 percent discount of the
$2.7 billion market value.

Wynn Resorts said an outside financial adviser valued the shares at about $800 million below market price because they are restricted under the terms of a shareholder agreement. The company issued a 10-year note for $1.9 billion, paying 2 percent annual interest to acquire Okada's shares.

Okada, who was the largest shareholder in Las Vegas-based Wynn Resorts, said in a statement through his company, Universal Entertainment Corp., that he would litigate to reverse the Wynn Resorts board's action.

Okada said the decision to remove him was "predetermined," and "represents the results of an incomplete and otherwise flawed corporate governance process."

In an emailed statement to the Wynn Macau board on Thursday, Okada said he wouldn't attend the Friday meeting.

"I am hereby formally notifying you that I disagree with the decision to remove me as a director, because it is based on false and misleading assertions in a report that was created only to serve as a means to discredit me and to which I have not had a reasonable opportunity to respond," he said.

Former FBI Director Louis Freeh and the firm of Freeh Sporkin & Sullivan LLP conducted the Wynn Resorts investigation. Wynn Resorts said its board was obligated to remove Okada due to his "unacceptable conduct."

The 47-page report alleged Okada, 69, and his associates improperly gave more than $110,000 in payments and gifts to regulators in the Philippines in violation of U.S. anti-corruption laws.

At its meeting in Las Vegas on Saturday, every member of Wynn Resorts board except for Okada voted to buy back his 24 million shares, which were held by Aruze USA Inc., a subsidiary of Universal Entertainment.

The 12 members of Wynn Resorts board include Chairman Steve Wynn, Okada, Russell Goldsmith, Linda Chen, Dr. Ray R. Irani, former Nevada Gov. Robert J. Miller, John A. Moran, Alvin V. Shoemaker, D. Boone Wayson, Elaine Wynn, Allan Zeman, and Marc Schorr.

Okada, however, will remain a member of the Wynn Resorts board until he steps down voluntarily or is voted out by two-thirds of the shareholders. Wynn Resorts' annual shareholder meeting is expected to be held in May.

Contact reporter Chris Sieroty at csieroty@
reviewjournal.com or 702-477-3893.