Japanese pachinko mogul sues Wynn Resorts in Tokyo

AP News
Posted: Aug 29, 2012 5:17 AM
Japanese pachinko mogul sues Wynn Resorts in Tokyo

TOKYO (AP) — Japanese pachinko tycoon Kazuo Okada has filed a lawsuit in Tokyo District Court seeking $140 million in damages from casino operator Wynn Resorts.

Universal Entertainment said in a statement Wednesday that it is seeking damages for harm caused to its share price and business due to Wynn's decision to remove Okada as a board member and reclaim the $2.77 billion of shares in the company owned by Okada's company, Universal Entertainment Corp.

Okada and billionaire Steve Wynn, the co-founder, chairman and CEO of Wynn Resorts, are former friends and business partners, but have been trading accusations of improprieties as regulators investigate alleged violations of U.S. anti-corruption laws on both sides.

The lawsuit filed in Tokyo this week is demanding 11 billion yen ($140 million) in damages. It alleges that Wynn's actions and comments hurt Universal Entertainment's stock price, hindering its business opportunities and damaging Okada's reputation.

"This action asserts that Steve Wynn has indulged in fraud, deception, theft and betrayal to maintain control of his gaming enterprises and enrich himself based on a false and predetermined pretext," Universal Entertainment said in a statement.

Universal's spokesman in Tokyo was not immediately available for comment.

Wynn Resorts said in a statement that it had not yet seen any documents related to Okada's court filing.

"However, we assume this is another attempt to distract from the real issues facing Aruze (a U.S. subsidiary of Universal) and Mr. Okada," it said.

The two sides have been feuding for months. Wynn refused to back Okada's plan to build a $2 billion casino resort project in the Philippines, saying it would compete with Wynn Resorts' own business there. Meanwhile, Wynn commissioned an investigation and sued Okada in Nevada for alleged breach of his fiduciary duties and other "gross improprieties."

In March, Universal countersued, questioning a donation by Wynn Resorts to the University of Macau that is now being probed by the U.S. Securities and Exchange Commission and Nevada Gaming Commission as a possible violation of the Foreign Corrupt Practices Act.

One of Japan's wealthiest businessmen, with net worth over $1.8 billion according to Forbes, Okada started out selling jukeboxes and then expanded into selling the machines used in pachislot, or slot machines, and pachinko, a popular form of pinball that skirts Japan's law against gambling by awarding prizes that players can later swap for cash.

Wynn Resorts' articles of incorporation provide for redemption at "fair value" of the shares held by "unsuitable" individuals. After designating Okada as unsuitable, the company sought to redeem the shares, valued at about $2.7 billion in mid-February, for about $1.9 billion.