Okada Manila minus Okada

(The Philippine Star) - January 14, 2018 - 12:00am

Middle of last year, local media reported that Japanese billionaire Kazuo Okada had been kicked out as board chairman of Tiger Resort Leisure and Entertainment, Inc. (TRLEI), owner of Okada Manila.

His removal was in connection with an internal investigation conducted by Universal Entertainment Corp. (UEC), to which the resort casino belonged to, which discovered that Okada improperly transferred company funds. UEC, whose founder and chairman is Okada, is a Japanese maker of slot machines. Okada is said to own 74 percent of publicly traded UEC, whose main business is manufacturing and selling pachinko machines and casino equipment.

The company said that it had found potential problems relating to a HK$135 million ($17 million) loan from TRA in 2015 to an unnamed third party. Almost the entire amount was subsequently transferred to Okada Holdings to personally benefit Okada.

UEC in its website had also revealed that a wholly owned subsidiary in South Korea, Universal Entertainment Korea Co. Ltd. disbursed $170,000 related to an $80 million loan taken out by Okada Holdings Ltd. for a land transaction in 2014. Okada Holdings, which is controlled by Okada and his relative, is the majority owner of Universal Entertainment. The amount disbursed equaled interest due on the loan that should have been paid by Okada Holdings rather than by the SoKor subsidiary.

In 2014 while he was a director of Universal Entertainment Korea, Okada allegedly made the firm pay the interest on the $80-million loan taken out by his family-owned firm from the Singapore branch of Korea Exchange Bank. The loan was supposedly the downpayment for the purchase of land as site for UEC’s Incheon World City Project which Okada allegedly did not even pay.

UEC also said that Okada in 2015 withdrew HK$16 million ($2 million) from a bank account of Tiger Resort Asia Ltd. (TRA), a HongKong subsidiary of Universal where Okada was the sole director at the time.

According to sources, it appears that Okada is an art collector and used part of the $17 million (HK$135), or about $2 million (HK$15 million) to pay for artworks that he had acquired.

Okada reportedly collects Japanese, Chinese and Korean art and has opened his own art museum in Tokyo.

The remaining HK $120.5 million remains unaccounted for, and may likely have been spirited away by Okada and his accomplices.

Charges had also been filed against him in Tokyo involving the HongKong art procurement and the $80-million loan for land procurement in Incheon both of which were carried out without proper authority.

Back in 2012, Okada was ousted as director of US casino operator Wynn Resorts following reports that he had wined and dined Philippine gaming officials in possible violation of US anti-bribery laws.

Okada is also facing criminal charges both here.

The gaming tycoon, Okada is facing two complaints for estafa filed by TRLEI before the Parañaque City Prosecutors’ Office. Another complaint for perjury was filed by TRLEI against him before the Makati City Prosecutors’ Office.

In the first estafa case, it has been alleged that Okada illegally paid himself over $3 million as his consultancy fees and salaries as TRLEI chief executive officer when he assumed the said position from April to May 2017.

 TRLEI alleged that Okada caused the disbursement of the corporate funds through his accomplice, Takahiro Usui, who was then TRLEI president and chief operating officer. The complainant claimed that there was no board resolution approving or authorizing the payment of such astronomical sums to Okada, whether as consultancy fee or salary.

It said that since these amounts received by Okada were fraudulently disbursed as these were not authorized or approved by TRLEI board of directors.

 The complaint also noted that Okada and Usui upon demand, failed to account for and return the disbursed amount held by them in trust, which creates a legal presumption of misappropriation and a ground for estafa or embezzlement.

The second estafa case involves the supply of light emitting diode (LED) fixtures to Okada Manila by Okada’s company, Aruze Philippines Manufacturing Inc. (APMI). The LED fixtures were later found to be defective and APMI turned out to be not authorized to engage in the manufacturing of lighting materials contrary to its claim.

Both Okada and Usui were removed in a June 2017 urgent special stockholders’ meeting of TRLEI as directors and officers.

Meanwhile, TRLEI had also filed perjury charges before the Paranaque City RTC against Okada and Usui after they claimed that TRLEI did not submit an updated general information sheet for 2017 before the Securities and Exchange Commission (SEC) and that TRLEI employees and establishments inside the resort were to be removed prior to closing shop.

 TRLEI insisted that the company submitted the amended GIS for 2017 and that there has been no mass layoff of employees nor closure of any business establishments operating in Okada Manila. In fact, more workers were being hired by Okada Manila to provide manpower for its now-burgeoning operations, it added.

Also, according to news reports, Okada and his company have been under investigation by the Federal Bureau of Investigation (FBI) over a $40 million payment to a Manila-based consultant in 2010. The investigation focused on whether the payment was aimed at helping Universal gain tax and ownership concessions for the casino from the Philippine government.

Okada Manila opened in December 2017. The $2.4-billion  casino resort was billed by Okada, who ranks among Japan’s wealthiest people, as a way to tap into the growth of Asian gaming and to diversify Universal’s revenues.

It is estimated that from a 13 percent local market share, Okada Manila’s share of the pie could grow to as high as 32 percent by the end of next year, but this of course would depend on how the casino resort would fare without its biggest fan.

For comments, e-mail at mareyes@philstarmedia.com

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