Wynn Resorts has requested that Kazuo Okada resign from his role as director of the company following allegations he made payments to gaming regulators in the Philippines.
On Sunday, Wynn Resorts announced that its Compliance Committee had concluded a year-long investigation after receiving an independent report detailing numerous apparent violations of the US Foreign Corrupt Practices Act by Aruze USA, its parent company Universal Entertainment Corporation and its principal shareholder, Kazuo Okada. Okada is a director of Wynn Resorts and Wynn Macau.
The Compliance Committee, chaired by former Nevada Governor Robert Miller, engaged several investigators, including Freeh, Sporkin and Sullivan, led by Louis Freeh, the former Director of the US FBI, which conducted an independent investigation. According to the company, Freeh’s investigators uncovered and documented more than 30 instances over a three-year period in which Okada and his associates engaged in improper activities for their own benefit in apparent violation of US anti-corruption laws and gross disregard for the company’s code of conduct. These “troubling discoveries” included cash payments and gifts totaling approximately $110,000 to foreign gaming regulators.
“Mr Okada and his associates and companies appear to have engaged in a long-standing practice of making payments and gifts to his two chief gaming regulators at the Philippines Amusement and Gaming Corporation, who directly oversee and regulate Mr Okada’s provisional licensing agreement to operate in that country,” the Freeh report said.
The report further stated that Okada and his associates had “consciously taken active measures to conceal both the nature and amount of these payments.”
Based on the findings of the Freeh report, Wynn Resorts' board of directors determined that Okada, Aruze USA and Universal Entertainment are “unsuitable” under the company’s articles of incorporation and has requested that Okada resign as a director. As a result, the board has redeemed Aruze USA’s 24 million Wynn Resorts shares.
“The Compliance Committee and the entire board are deeply disturbed by the behaviour of Mr Okada and we have fulfilled our obligations to our stockholders, the State of Nevada and the Wynn community,” said former Governor Miller. “As directors of a gaming company privileged to hold licences, we have a duty to uphold the highest ethical standards and comply with the laws and the terms of the licences upon which our business depends. Unfortunately, it is very clear from the Freeh report that Mr Okada repeatedly flouted these requirements.”
Wynn Resorts has filed a lawsuit against Okada, Aruze USA and Universal Entertainment in the Nevada District Court of Clark County for breach of fiduciary duty and related offences.
The news follows a lawsuit filed in January by Okada against the US-based casino operator in which he alleged that the company had refused to allow him to see its books. The legal action was prompted by concerns over the use of certain funds invested through Aruze USA.
Responding at the time, Wynn Resorts said the lawsuit was an attempt to “deflect attention” from a dispute between Okada and the board over the former’s decision to “directly compete” with the company by pursuing a casino project in the Philippines.
