Kazuo Okada is a true maverick, an unconventional Japanese self-made billionaire who takes big chances. He helped Steve Wynn fund the casinos with Wynn’s name on top, then built one with his own name on top in Manila. As fraud and bribery allegations mounted against Okada, the embattled pachinko billionaire always presented reasonable explanations. But with Okada detained and questioned by Hong Kong’s Independent Commission Against Corruption on fraud allegations, he may have run out of excuses.
On Monday, Universal Entertainment, the company Okada founded in 1969 to repair jukeboxes, announced he had been arrested by the ICAC. “All the allegations made against me are entirely false,” Okada tells This Week In Asia. “[Universal] is simply attempting to irreparably damage my reputation. I am confident that the investigation will prove the absurdity of these allegations and that I will be able to regain control of the companies I founded.”
Okada is suing his family in Hong Kong to take back Universal.
“Mr Okada himself is not a threat nor risk to the company,” a Universal spokesperson says.
The septuagenarian with jet black hair and ramrod posture was ousted in June last year as chairman of Universal and its Philippine subsidiary, Tiger Resort, Leisure and Entertainment, operator of the open but unfinished US$2.4 billion Okada Manila casino hotel.
Wynn, who once called Okada his “best friend”, used the Philippine project as a pretext to remove Okada as Wynn Resorts vice-chairman and redeem his shares at a US$900 million discount, payments spread over 10 years.
Over five decades, Okada turned a passion for tinkering with vacuum tubes into a gaming machine powerhouse, omnipresent in Japan’s massive pachinko market and on casino floors globally. Fate took a hand in 2000 when he met Wynn, ironically, just ousted from a company he founded, Mirage Resorts.
During the next few years, Okada provided US$455 million instrumental in the construction of Wynn’s Las Vegas flagship and Wynn Macau casinos. Through Universal, Okada controlled 20 per cent of Nasdaq-listed Wynn Resorts, the second largest shareholding behind Steve Wynn, and held the vice-chairman post. “I love Kazuo Okada as much as any man I’ve ever met in my life,” Wynn had declared.
In 2008, Philippine gaming regulator Pagcor granted Universal one of the four casino licences for Entertainment City on Manila Bay. Okada says he invited Wynn to join the project. Okada hoped that a Philippine integrated resort could help realise his then distant dream of a casino licence in Japan.
In 2011, Wynn suddenly – and dubiously – declared Okada’s Philippine ambitions threatened Wynn Macau, engineering his removal and cut-rate stock redemption. Sceptics noted what changed between Okada’s Philippine licence and his boardroom expulsion was Steve Wynn’s (second) divorce from Elaine Wynn that halved Wynn’s personal shareholding, leaving Universal as Wynn Resorts’ largest stockholder, posing a potential takeover threat.
Amid the Wynn feud, Philippine authorities charged Tiger Resorts violated the law requiring land ownership by Philippine citizens. The charges disappeared in 2015 when Tiger struck a deal with then president Benigno Aquino III’s cousin Antonio Cojuangco, head of Philippine hospitality chain All Seasons Hotel and Resort Corp. However, construction delays meant the project missed its March 2015 completion deadline, so Tiger forfeited its 100 million Philippine peso (US$2.2 million) performance bond to Pagcor, which oversees Entertainment City.
Amid allegations of bribes to Philippine officials, Okada sued three former employees for unauthorised transfers of US$15 million to an associate of former Pagcor chairman Efraim Genuino. He sued Reuters for reporting US$40 million in transfers to Genuino’s associate via a Hong Kong shell company. Related charges and countercharges triggered investigations in at least five jurisdictions.
Then came the bombshell. Since its founding, Universal had been synonymous with Okada, but in June last year, Universal removed him, claiming he misappropriated US$20 million through Tiger, which also ousted him. Okada’s ICAC questioning relates to those allegations.
Universal managed to remove Okada despite his 69 per cent ownership stake. Those shares reside in Hong Kong-registered Okada Holdings, with Okada owning 46 per cent, his son, daughter and wife controlling the majority. Universal president Jun Fujimoto, who Okada calls a protégé, reportedly convinced the family to vote out the patriarch. Okada’s wife Takako became a Universal director, overseeing the Okada Art Museum.
Post-Okada Universal has lately begun moving ahead smartly. After Wynn Resorts purged Steve Wynn, Universal reached a settlement in March over its seized stock and payments suspended during litigation, netting Universal US$2.6 billion. That amount disappointed many Universal shareholders since the 24.5 million shares were worth $2.8 billion in 2012 and $4.4 billion last March.
“It was a fair price,” a Universal executive, speaking anonymously, says. “It would have taken years to get the full amount back, a huge amount of management time and huge legal expense.”
The settlement gives Universal funds to finish Okada Manila, slow to complete hundreds of guest rooms since a soft opening in December 2016. In June, Tiger appointed seasoned investment banker Byron Yip as COO and has promised a property grand opening this year. Now that Japan has completed casino legalisation, Okada Manila puts Universal in a favourable position to realise its founder’s dream of a Japanese casino licence – without him.