Wynn Resorts Ltd. says Okada countersuit doesn’t deny allegations

Wynn Resorts Ltd. said Tuesday that Kazuo Okada’s counterlawsuit doesn’t contain any meaningful denial of the allegations that he and one of his companies made improper payments to Philippines gaming regulators.

“Despite its enormous length and scurrilous allegations, the Okada response fails to contain any meaningful denial of the facts,” Wynn Resorts said in a statement. The company said it looked “forward to having Mr. Okada’s actions and the company’s response presented to and adjudicated in court.”

The statement came in response to a Monday lawsuit filed in U.S. District Court in Las Vegas by Okada’s attorneys. Okada sued Steve Wynn, his former business partner, and Wynn Resorts alleging the company’s board violated racketeering laws by voting to redeem his shares at a 30 percent discount. The deal would issue a 10-year note to pay Okada
$1.9 billion, an $800 million discount.

Okada on Tuesday released a 15-minute video on the website of his Tokyo-based Universal Entertainment Corp., saying he has trusted Wynn and never “scrutinized his activities.” The Japanese billionaire was Wynn’s partner and largest investor for 12 years.

“I became suspicious when Steve Wynn suddenly changed his attitude to question Universal’s investment in the Philippines after he had long been supporting it from behind the scenes,” Okada said. “His attitude changed because I became suspicious regarding the purpose and reason for the large (Wynn Resorts) donation made to the University of Macau and opposed it.”

Okada’s lawsuit seeking access to records about the donation, among other Wynn Resorts financial documents, brought the long-simmering dispute to the surface earlier this year. He has not said specifically what about the donation he considers suspicious.

Okada said it was only last year that Wynn began to object to Universal Entertainment’s plans to build a $2.3 billion casino in Manila Bay, the Financial Times reported Tuesday. Nevertheless, Universal Entertainment broke ground in January on the project, which includes two casinos and three hotels and is expected to open in 2013.

Okada has said he plans to open more casinos in Asia in 2015.

The 56-page federal court lawsuit filed by Okada’s attorneys disputes allegations made by Wynn Resorts and former Nevada Gov. Bob Miller. During a conference call last month, Okada was described as “unsuitable” as a shareholder because of gifts given to gaming regulators in the Philippines.

Okada was deemed unsuitable by the Wynn Resorts board of directors after a yearlong internal investigation of his business practices by former FBI director Louis Freeh.

Okada described Wynn Resorts’ move to remove him from the company he co-founded as a scheme designed to defraud him of his stake in the Las Vegas-based gaming company.

“We are taking this action to protect our investment from what we believe to be an unconscionable course of conduct perpetrated by Steve Wynn and Wynn Resorts’ board of directors to facilitate Mr. Wynn’s agenda of maintaining his absolute control over Wynn Resorts to enrich himself,” Okada said in a statement late Monday.

Wynn Resorts said it plans a yet-to-be-scheduled special board meeting to remove Okada as a director. Okada, 69, has already been removed from the boards of Wynn Resorts subsidiaries Wynn Macau Ltd. and Wynn Las Vegas Capital Corp.

Wynn Resorts originally filed a lawsuit accusing Okada of breaching his fiduciary duties as a board member because his Manila property would compete with Wynn for Chinese gamblers.

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

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