Okada asks judge to restore Wynn shareholder rights

PUBLISHED : Saturday, 16 June, 2012, 12:00am
UPDATED : Saturday, 16 June, 2012, 12:00am


Japanese pachinko billionaire Kazuo Okada asked a federal court in the United States to restore his rights as the largest shareholder of Wynn Resorts, and to halt an 'unlawful' bid by Wynn chief executive Steve Wynn to remove him from the board.

The two gaming moguls, once business partners and close friends, fell out dramatically in January and a legal battle for control of seats on the board of Las Vegas Wynn Resorts is turning bitter.

Okada's Universal Entertainment also filed an amended counterclaim against American gaming tycoon Wynn on Thursday, saying he had indulged in 'fraud, deception, theft and betrayal to maintain control of his gaming enterprises'.

Okada asked a federal judge in Nevada to immediately restore the rights of his subsidiary Aruze USA, through which he invested in Wynn Resorts as its largest shareholder.

'We believe the conflict between Okada and Wynn is going to drag on for a long time,' said Chelsey Tam, an analyst at Emperor Securities.

Okada filed a suit in a Nevada court in January, seeking access to Wynn Resorts' records over a HK$1 billion donation to the University of Macau Development Foundation.

In February, Wynn Resorts sued Okada and forcibly redeemed a 20 per cent stake owned by Okada and his associates at a 31 per cent discount, saying he was 'unsuitable'.

Wynn accused Okada of making improper payments to Philippines gambling officials, and has filed a preliminary proxy statement, calling for a special shareholder meeting to remove him as director. Okada was ousted from Wynn's Macau unit Wynn Macau in February but remains on Wynn Resorts' board.

The proxy statement did not list a date, but the company is allowed to call such a meeting with 10 days' notice. Okada filed a counterclaim in March in Las Vegas Federal Court.

Shares in Wynn Macau closed down 5.74 per cent to HK$17.4 yesterday, and the benchmark Hang Seng Index climbed 2.26 per cent.

'We don't think the counterclaim will have a real impact on the operation of Wynn but the share price may be adversely affected in the short term,' Tam said.

Wynn is building a new US$4 billion casino in Macau's Cotai district, which is expected to open in 2016.

Tam cited weak sentiment and fears of a mainland economic slowdown as challenges.

But she said consumer confidence, and liquidity in China - 'crucial for the Macau gaming industry' - would improve.

Wynn Resorts was not immediately available for comment.