Wynn Resorts defends ouster of director

Wynn Resorts of Las Vegas will pay Okada us$ 1.9 billion over 10 years for his 20 percent stake in the gaming company, held by Okada's company Aruze USA Inc. Okada's stake is worth an estimated us$ 2.77 billion.

Okada's 24 million shares were redeemed for a 30 percent discount, which the company called "fair value." The company issued a us$ 1.9 billion promissory note maturing in 2022 and carrying an annual interest rate of 2 percent.

Wynn Resorts' board of directors said in a statement that it moved Saturday to buy out Okada after an investigation by former FBI Director Louis Freeh discovered alleged improper payments to foreign officials.

Bob Miller, a former Nevada governor who sits on the Wynn board and sits on its compliance committee, said Tuesday during a conference call covered by The Wall Street Journal that its licenses to operate casinos in Las Vegas and Macau could have been “put under a cloud of scrutiny” if it didn’t act.

Okada said Monday he would sue to block the board’s “outrageous” action and accused it of operating like a “star chamber.” His company, Universal Entertainment Corp., said Tuesday in a statement the “entire process has been tainted.”

Among the allegations made by Wynn are that Okada made improper payments to gambling regulators in the Philippines, including paying about us$ 110,000 in expenses for regulators at Wynn casinos. Okada, Wynn said over the weekend, was the only director on the board not to sign the company code of conduct or to participate in Foreign Corrupt Practices Act training for board members.

A person familiar with a lawsuit filed by Wynn accusing Okada of breach of fiduciary duty told the Journal that part of Okada’s defense could be that he was targeted after raising concerns about a us$ 135 million donation made by Wynn Resorts to a university in Macau, where it is seeking approval for another casino. Okada filed a lawsuit in January over the Macau matter, which prompted an initial inquiry by the Securities and Exchange Commission, the Journal report said.

The company, according to the Journal report, denied wrongdoing in Macau and said Okada’s challenges to the board process were just an attempt to distract from his own alleged misdeeds.

On the other hand, Philippine Amusement and Gaming Corp. (Pagcor) Chairman Cristino Naguiat said Okada, who has a license to operate in Pagcor's Entertainment City, has denied the bribery allegations over which he was ousted from Las Vegas-based Wynn Resorts this weekend. "Wynn raises 'suitability' issues against Okada," Pagcor said in a statement. "If such are established, Pagcor will take that into consideration and review the contract."

Naguiat said no Pagcor official has received any cash gift since July 2010, when he took over the casino regulator and operator. He said he couldn't speak for previous management. Naguiat said Kazuo Okada saw him to apologize for Pagcor's name being dragged into a "shareholder battle'' at Wynn.