Wynn Resorts plans vote on removing board member

AP News
Posted: Mar 07, 2012 11:22 AM
Wynn Resorts plans vote on removing board member

Casino operator Wynn Resorts Ltd. plans to hold a special meeting for shareholders to vote on a proposal to remove the Japanese tycoon Kazuo Okada as a board member.

The plans disclosed Wednesday follow Wynn Resorts' announcement last month that a yearlong investigation showed that Okada repeatedly violated company conduct policies and U.S. anti-corruption laws. Wynn Resorts has said that it plans to reclaim the shares its biggest shareholder controls at a steep discount.

Okada owns his Wynn Resorts stake through his Japan-based casino game company, Universal Entertainment Corp. The company has said it will seek a court order to prevent the forced buyback of his 20 percent stake in Wynn Resorts.

Okada and billionaire Steve Wynn, the founder, chairman and CEO of Wynn Resorts, are former friends and business partners, but they have been at odds for months.

Wynn Resorts said in a regulatory filing on Wednesday that its investigation showed "Okada has not been acting in the best interests of the company and its stockholders."

The Las Vegas company also disclosed that it had requested that Okada resign from its board, but that he refused to do so.

Wynn Resorts said that shareholders of record on March 30 will be allowed to vote at the meeting. The date has not been set yet. It would take a vote of at least two-thirds of shareholders to remove Okada from the board.

Okada has already been removed from the boards of subsidiaries Wynn Macau Ltd. and Wynn Las Vegas Capital Corp.

Wynn Resorts said last month its investigation, which was led by a former FBI director Louis Freeh, found more than three dozen instances over a three-year period in which Okada and his associates engaged in "improper activities for their own benefit."

That included cash payments and gifts totaling about $110,000 to foreign gaming regulators, the company said. Wynn Resorts said the actions were in violation of U.S. anti-corruption law.

The investigation, also found Okada and his associates consciously took actions to conceal "the nature and amount of these payments," Wynn Resorts said.

Based on the report, Wynn Resorts said its board found that Okada is "unsuitable." The company's articles of incorporation provide for redemption at "fair value" of the shares held by unsuitable individuals. The shares were worth about $2.7 billion in mid-February and Wynn Resorts said it would buy them back for about $1.9 billion.

Okada has said that he's invested $380 million in Wynn Resorts since 2000. In January he sued Wynn Resorts in Nevada state court over a pledge by the company to donate $135 million to the University of Macau over 10 years.

Shares of Wynn Resorts gained $2.75, or 2.3 percent, to $122.13 in late morning trading. The stock has traded in a range of $101.02 to $172.58 over the past year.