Embattled Wynn Stakeholder Fights To Keep Shares

Published February 20, 2012 4:54PM (EST)

The biggest stakeholder in Wynn Resorts Ltd. will fight the casino company's effort to forcibly buy back all of his shares.

Kazuo Okada will "take all legal actions necessary to protect its investment and prevent" Wynn's attempt to sever ties with him, according to a statement late Sunday from Okada's Universal Entertainment Corp.

Earlier Sunday, Wynn had accused the Japanese tycoon of making improper payments to overseas banking regulators, a violation of U.S. anti-corruption laws. It filed a lawsuit accusing Okada of betraying shareholders' interests, and asked him to resign from Wynn's board.

In its statement, Universal called Wynn's move "outrageous" and said more oversight of the Wynn board is necessary.

Universal, the casino game maker that Okada founded, held almost 20 percent of Wynn's shares through a private subsidiary called Aruze USA Inc. The 24 million shares are worth about $2.7 billion based on Friday's closing price.

A year-long investigation into Okada's business found more than three dozen instances in which Okada and his associates engaged in "improper activities for their own benefit," Wynn said.

That included cash payments and gifts totaling about $110,000 to foreign gambling regulators, Wynn said.

Wynn Resorts' articles of incorporation allow it to buy back at "fair value" the shares of a person deemed "unsuitable." Wynn said the report proves that Okada is unsuitable.

The dustup escalates Okada's fight against former business partner Steve Wynn, founder of Wynn resorts.

Since 2000, Okada has invested $380 million in Wynn Resorts. Last month, he filed a lawsuit against the company seeking information about Wynn's $135 million donation to the University of Macau; its 2010 amendment to a shareholders agreement among Okada, company founder Steve Wynn and Wynn's ex-wife, Elaine Wynn; and the use of $30 million that Okada gave to Wynn Resorts in 2002 to help develop a Macau casino project.

In Las Vegas, Wynn Resorts Ltd. owns the Wynn Las Vegas and Encore Las Vegas resorts. The company also owns Wynn Macau and Wynn Encore Macau in China.

By Salon Staff

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