dwin Lacierda, a spokesman for Aquino, told reporters the country's Department of Justice had been asked to investigate whether bribes were paid in relation to the project being developed by Okada's Tokyo-based company Universal Entertainment. "If there's a proof that the licence was obtained through bribery, then there may be reasons to consider cancelling the contract," Lacierda said. "Obviously, it is something that we will not countenance."
Shares in Universal sank to a nine-month low on Monday after Reuters reported U.S. gaming regulators were investigating payments from its affiliates to an associate of the former head of the Philippine gaming regulator. Shares in the Tokyo-based company closed down 11 percent on Monday and have lost nearly 30 percent of their value this year.
Reuters reported on Friday that a Universal subsidiary made a us$ 5 million payment in May 2010 to Rodolfo Soriano, a close associate of the former head of the Philippine Amusement and Gaming Corp., the country's gaming regulator which is known as PAGCOR, according to a Reuters examination of bank records, corporate filings, court documents and records prepared by Universal staff.
The payment to Soriano was made via a shell company in Hong Kong and was part of us$ 40 million in transfers made by Universal's US affiliate Aruze USA that are now a focus for investigators. It was made at a time when Universal was lobbying to win concessions for its casino from the administration of then-Philippine President Gloria Macapagal Arroyo.
PAGCOR issued a statement on Monday saying the Reuters report contained "serious allegations." The agency said it was asking investigators to "get to the bottom of this alleged payoff" and asked Philippine authorities to work with the Federal Bureau of Investigation in the United States.
"The group of Okada is a major investor in the Philippines and this is the reason why PAGCOR is giving them a chance to address all the issues," the regulator said. It added, if "they have violated Philippine laws and they fail to comply with the provisions of the provisional licence issued to them, they cannot commence their casino operations."
Universal spokesman Nobuyuki Horiuchi said the company had no immediate comment. The company, which is controlled by Okada, has been developing a casino resort in the Philippines aimed at high-rollers from China since 2008. Okada, who serves as Universal's chairman, founded the company and remains an owner of almost 70 percent of its shares through a family trust.
Monday's decline in Universal shares was the biggest one-day percentage drop since Feb. 20 when Las Vegas titan Steve Wynn, a former partner, said Okada's company had acted improperly in paying for about us$ 110,000 in entertainment expenses to foreign gaming regulators, including officials from the Philippines.
Separately, a Philippine congressman who has urged the government to suspend the Universal casino project called for a legislative hearing on the matter. Representative Teddy Casino had previously submitted a resolution calling for an investigation. "We will have to include new pieces of evidence unearthed by Reuters news agency that can help complete the picture of corruption in PAGCOR," Casino said in a statement.
Philippine Senator Miriam Santiago also called for a Senate investigation of the reported payment to Soriano, citing the Reuters report. Okada has been seeking to have a U.S. court reverse an earlier move by Wynn to redeem his shares in Wynn Resorts at a 30 percent discount after the board determined he was an "unsuitable" shareholder.
That finding was based in part on Universal's record of paying for entertainment and lodging expenses for PAGCOR officials, including Soriano and former PAGCOR chief Efraim Genuino, Wynn said at the time.
Both Soriano and Genuino are the targets of a corruption case brought by the Aquino administration in 2011. PAGCOR said on Monday that the report of payments to Soriano would "strengthen its plunder case" against the two men. Soriano and Genuino could not be reached for comment.
On Friday, one of the U.S. law firms representing Okada withdrew from the lawsuit against Wynn. Paul Spagnoletti, an attorney with the New York offices of Davis, Polk, Wardwell, said his firm had stopped representing the Japanese businessman. Spagnoletti would not cite a reason for the sudden withdrawal.
The revelation of the contested payments is the latest twist in a bitter falling out between Okada, who made his fortune making and marketing pachinko machines - a mix of slot and pinball machines - and Las Vegas casino magnate Steve Wynn. Okada was Wynn's partner and largest investor until Wynn charged this year that Okada had broken compliance rules - and possibly US law - by paying some us$ 110,000 in entertainment and other expenses for gaming regulators from the Philippines and Korea.
The investigation of the much larger payments by Okada's company threatens to complicate Universal's attempt to get a US federal court to reverse Wynn's decision to redeem Okada's Wynn Resorts shares at a discount. It could also complicate Universal's push to complete the casino on Manila Bay that it began building in January and has promoted as a VIP-destination resort for China's newly rich, some critics say.
"I don't have any illusions that it is going to be stopped, but there has to be accountability," said Teodoro Casino, a Philippine congressman who has urged the government to suspend the Universal project.