Japanese pachinko tycoon Kazuo Okadahas filed a lawsuit in Tokyo District Court seeking $140 million in damagesfrom casino operator Wynn Resorts.
Universal Entertainment said in a statement Wednesday that it is seekingdamages for harm caused to its share price and business due to Wynn's decisionto remove Okada as a board member and reclaim the $2.77 billion of shares inthe company owned by Okada's company, Universal Entertainment Corp.
Okada and billionaire Steve Wynn, the co-founder, chairman and CEO of WynnResorts, are former friends and business partners, but have been tradingaccusations of improprieties as regulators investigate alleged violations ofU.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 UniversalEntertainment's stock price, hindering its business opportunities and damagingOkada's reputation.
"This action asserts that Steve Wynn has indulged in fraud, deception,theft and betrayal to maintain control of his gaming enterprises and enrichhimself based on a false and predetermined pretext," UniversalEntertainment said in a statement.
Universal's spokesman in Tokyo was not immediately available for comment. Norwere Wynn's staff in Macau.
The two sides have been feuding for months. Wynn refused to back Okada's planto build a $2 billion casino resort project in the Philippines, saying it wouldcompete with Wynn Resorts' own business there. Meanwhile, Wynn commissioned aninvestigation and sued Okada in Nevada for alleged breach of his fiduciaryduties and other "gross improprieties."
In March, Universal countersued, questioning a donation by Wynn Resorts to theUniversity of Macau that is now being probed by the U.S. Securities andExchange Commission and Nevada Gaming Commission as a possible violation of theForeign Corrupt Practices Act.
One of Japan's wealthiest businessmen, with net worth over $1.8 billionaccording to Forbes, Okada started out selling jukeboxes and then expanded intoselling the machines used in pachislot, or slot machines, and pachinko, apopular form of pinball that skirts Japan's law against gambling by awardingprizes that players can later swap for cash.
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 orderto prevent the forced buyback of his 20 percent stake in Wynn Resorts.
Wynn Resorts said in a regulatory filing on Wednesday that its investigationshowed "Okada has not been acting in the best interests of the company andits stockholders."
The Las Vegas company also disclosed that it had requested that Okada resignfrom its board, but that he refused to do so.
Wynn Resorts said that shareholders of record on March 30 will be allowed tovote at the meeting. The date has not been set yet. It would take a vote of atleast 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 FBIdirector Louis Freeh, found more than three dozen instances over a three-yearperiod in which Okada and his associates engaged in "improper activitiesfor their own benefit."
That included cash payments and gifts totaling about $110,000 to foreign gamingregulators, the company said. Wynn Resorts said the actions were in violationof U.S. anti-corruption law.
The investigation, also found Okada and his associates consciously took actionsto conceal "the nature and amount of these payments," Wynn Resortssaid.
Based on the report, Wynn Resorts said its board found that Okada is"unsuitable." The company's articles of incorporation provide forredemption at "fair value" of the shares held by unsuitableindividuals. The shares were worth about $2.7 billion in mid-February and WynnResorts 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. InJanuary he sued Wynn Resorts in Nevada state court over a pledge by the companyto donate $135 million to the University of Macau over 10 years.