Casino tycoon under investigation in Japan
MANILA - Japanese billionaire Kazuo Okada has been removed as board chairman of Tiger Resort Leisure and Entertainment, Inc. (TRLEI), Okada Manila has announced.
Okada Manila, which is under TRLEI, announced in a June 16 press statement that the decision was made at a special stockholders meeting and an organizational meeting of the board.
It said the move was prompted "as a consequence of the recent actions at Universal Entertainment Corporation (UEC)," which the resort casino belongs to.
Okada Manila said retired Justice Manuel Lazaro has replaced the Japanese casino tycoon as board chairman, with Kenji Sugiyama as president. "Antonio Cojuangco, Rey David and Steve Wolstenholme remain as directors," it added.
UEC on Monday said that an internal investigation uncovered $2 million in improper transfers of company funds by its chairman Kazuo Okada, a disclosure that followed its claim earlier this month of an improper $17 million loan that allegedly benefited the billionaire.
Okada could not be reached for comment. David Krakoff, a lawyer for Okada in an unrelated legal case in the United States, did not respond to a request for comment.
Universal previously disclosed that Okada, who founded the company five decades ago and built it into one of Japan's largest makers of slot and pachinko gambling machines, would not be reappointed as a director when shareholders vote on board members later this month.
Okada has played a leading role in developing, managing and promoting Okada Manila, a $2.4 billion casino resort that Universal opened in the Philippines this year. Universal has said it does not believe the investigation will impact its business.
The statement issued on the company's website on Monday said that the company had found that a wholly owned subsidiary of Universal in South Korea, Universal Entertainment Korea Co., Ltd, had disbursed $170,000 related to a $80 million loan taken out by Okada Holdings Ltd for a land transaction in 2014.
Okada Holdings, which is controlled by Okada and his relatives, is majority owner of Universal Entertainment.
The amount disbursed was equal to interest owed on the loan that should have been paid by Okada Holdings rather than the Universal subsidiary in South Korea, Universal said.
The company also said on Monday that it found Okada had in March 2015 withdrawn HK$16 million ($2.05 million) from a bank account of Tiger Resort Asia Limited (TRA), a Hong Kong subsidiary of Universal in which Okada was the sole director at the time.
Universal said in the statement that both transactions were carried out without the necessary internal procedures and may constitute a "serious violation of governance."
In a statement on its website on June 8, Universal said it had found potential problems related to a HK$135 million ($17.31 million) loan from TRA in 2015 to an unnamed third party. Nearly all of that amount was subsequently transferred to Okada Holdings Ltd with the objective of personally benefiting Okada, the company said.
Separate from the recent allegations, Okada and his companies have been under investigation by the Federal Bureau of Investigation over a $40 million payment to a Manila-based consultant in 2010. The FBI's probe is focused on whether the payment was aimed at helping Universal gain tax and ownership concessions for the casino from the Philippine government, according to people with knowledge of the matter.
Universal and Okada have denied any wrongdoing and filed a defamation lawsuit against Reuters in 2012 for its reporting on the payments. The Tokyo District Court ruled in 2015 that Universal's case was without merit. Last year the Tokyo High Court upheld that ruling, dismissing Universal's appeal. Universal has appealed to the Supreme Court of Japan. - with a report from Reuters