The growing battle between Wynn Resorts [WYNN Loading... () 
] CEO Wynn and co-founder Okada is set to escalate another notch, after both billionaires traded accusations in past weeks about improper payments to foreign gambling regulators. The nine-person Macau board — which includes five members with ties to Wynn — can take unilateral action to drop Okada from among their ranks, according to the two people with knowledge of the impending meeting.
The Macau unit can take action on its own, both sources said. But parent company Wynn Resorts cannot remove Okada from its 12-person board without first convening a special shareholders' meeting, said one of the two people.
Wynn spokesman Paul Kranhold had no comment on the Macau meeting. James Golden, a spokesman for Okada's Universal Entertainment, said he had no information on the meeting and could not comment.
Wynn Resorts on Sunday announced it had forcibly re-purchased Okada's nearly 20 percent stake in the company, saying an internal investigation headed by former FBI Director Louis Freeh uncovered dozens of instances over a three-year period in which Okada and associates "engaged in improper activities for their own benefit in apparent violation of U.S. anti-corruption laws."
Okada responded by accusing Freeh of "a rushed investigation that lacks absolute findings," and has since threatened to file suit in Las Vegas for a temporary restraining order to block the company's action.
Okada, an engineer by training, helped bankroll Steve Wynn's empire, today worth an estimated $14 billion. His dispute with Wynn erupted into the open in January when Okada filed suit against his partner of 12 years for blocking access to financial documents related to a $135 million company donation to the University of Macau.
That lawsuit has prompted the U.S. Securities and Exchange Commission to start an informal inquiry into Wynn.
Postponement Puzzle
Okada's lawsuit over the Macau donation had been due to go back to court on Thursday, with a U.S. judge deciding whether the Asian investor should get access to those records. But the hearing was abruptly postponed without reasons given, with no word on when it would proceed.
Wynn Macau's [1128.HK Loading... ()
] nine person board includes Steve Wynn himself, two of his former employees, and current Wynn board member Allan Zeman, who is also vice-chairman of the Macau operation, according to Wynn Macau's internet site. Ian Michael Coughlan, Wynn Macau's executive director, previously was director of the parent company's worldwide hotel operations.
Wynn's complaint against Okada this week — which accompanied the announcement of the forced buyback and the release of Freeh's full internal report — sought to paint a picture of a rogue board member pursuing a private agenda.It comes at an inopportune time for Okada, who has mostly been careful to maintain a low profile while exploring and developing projects from the Philippines — where he is pushing a $2 billion casino — to North America.
Okada, said by Forbes magazine to be worth $2.1 billion in 2011, made his fortune in pachinko: a uniquely Asian game that mixes slot machine style gambling with pinball that rakes in about 20 trillion yen ($250 billion) annually. He was Wynn Resorts' largest shareholder, holding more than double the stake of its eponymous chairman.But the envisioned Philippine mega-casino, due for completion in 2014, may have engendered his subsequent falling-out with Wynn. The project marks the Japanese tycoon's first foray into developing a casino, rather than making the pachinko and slot machines that go into them.
Wynn has said he declined to get involved in the Philippine venture and that it puts the two in direct competition.
Shares in Wynn Resorts slid 1.4 percent on Wednesday.Copyright 2012 Thomson Reuters. Click for restrictions.
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