Wynn vows to fight suit filed by major shareholder
Casino operator Wynn Resorts fired back at its largest shareholder, calling a lawsuit filed against the company by Japanese pachinko billionaire Kazuo Okada 'preposterous'.
Okada, a director of the company and its biggest shareholder with a 20 per cent stake, is a long-time business partner of Las Vegas gaming magnate Steve Wynn.
Okada on Wednesday filed a suit in a Nevada court seeking access to Wynn Resorts' records over an 'unprecedented' HK$1 billion donation to the University of Macau Development Foundation announced by Wynn Macau last year, as well as other transactions, after his previous requests to look at the books were 'summarily rebuffed'.
Those transactions included a US$120 million investment Okada made in the company in 2002 to help fund development of the Wynn Macau casino resort.
Wynn Resorts responded yesterday by saying Okada had been removed as vice-chairman in October, and characterised his lawsuit as intended 'to deflect attention from a dispute between Mr Okada and the board ... related to Mr Okada's decision to directly compete with the company by pursuing a project in the Philippines despite repeated admonishments from the board'.
Analysts speculated that Okada's lawsuit could be intended to prod Wynn Resorts into buying out his US$2.7 billion stake in Wynn Resorts to help fund new casino resorts in Asia by his own firm, Universal Entertainment (formerly Aruze). 'We believe Okada's motivation could relate to Universal's liquidity needs in order to develop casino resorts in the Philippines (Manila) and South Korea (Incheon), in addition to what he may have in mind for casino development in Japan should legislation eventually pass,' Bill Lerner of Union Gaming Research wrote in a report.
Lerner said the spectre of potential competition between Wynn Macau and Okada's planned Manila casino resort - early design renderings of which have been said to closely resemble Wynn's Las Vegas and Macau properties - may have soured what was previously a strong business partnership between the two men.
Wynn was asked in 2008 whether he would participate in Okada's Manila project.
'This is something that Kazuo Okada and his company Aruze has done on its own initiative,' he said. 'He consults me and has discussed it with me extensively. And I've given him my own personal thoughts ... and advice. And to the extent that he comes to me for any more advice or input, all of us here at the company would be glad to give him our opinion. But that is short of saying that this is a Wynn Resorts project.'
Wynn's open door policy towards advising Okada on his Manila project now appears to be a thing of the past. 'The dispute also involves Mr Okada's misuse of his director position to imply the company's participation in projects that the company had made firm decisions to avoid,' the firm said yesterday, adding it would 'vigorously' defend itself against the lawsuit.