Wynn’s major investor has ‘lost trust’ in resort company management

Kazuo Okada, the Japanese billionaire and dissident shareholder suing Wynn Resorts Ltd. for access to financial records, has "lost trust in management" of the gaming company, according to a brief filed with a Las Vegas court.

In a prehearing brief filed Friday in Clark County District Court, attorneys for Okada, who owns 19.66 percent of Wynn Resorts, accused the company of failing to open certain confidential business records for him to review, making it difficult for him to fulfill his duties as a director.

Judge Elizabeth Gonzalez has scheduled a Thursday hearing on the issue.

Okada filed a lawsuit Jan. 11 in Clark County District Court seeking a court order to force Wynn Resorts to release financial records, particularly documents relating to the
$135 million donation a company subsidiary, Wynn Macau Ltd., has pledged to the University of Macau Development Foundation.

Okada, who is 68, also wants to know how $30 million he invested in Wynn Resorts in 2002 to help develop a Macau resort was used. Okada, who owns slot machine maker Aruze USA and its parent company Universal Entertainment Inc., has invested $380 million in Wynn Resorts since 2000.

Attorneys for Wynn Resorts claim the donation issue is a smokescreen, and have said in court papers that Okada should have raised any concerns with company founder Steve Wynn.

In Wynn's view, the dispute stems from the Wynn Resorts board decision not to invest in Okada's development of a casino hotel in Manila, which it saw as competition for other Wynn properties in Asia. Attorneys for Wynn Resorts also accused Okada of misrepresenting any links between Wynn and Okada's the project, which is under construction adjacent to Manila Bay.

"We have a sharp disagreement with our colleague with regard to the Philippines," Wynn told analysts on a conference call Thursday. "And we have expressed our conviction that it was not an appropriate business opportunity for us for a couple of years now."

Wynn assured analysts it was the "unanimous opinion of the board of directors" not to go into business in the Philippines.

Okada's response to Wynn's Jan. 30 filing never mentions Universal Entertainment's $2 billion project in Manila. In the 17-page filing, attorneys for Okada focus on the businessman's duties as a Wynn director and dispute the company's claim there is no "right of director inspection in Nevada."

In their brief Friday, Okada's attorneys claim that being denied access to the records he requested was impeding his ability to act as a director.

"Mr. Okada has a fiduciary duty to act in the best interest of the corporation and its stockholders, and to act in an informed manner," Okada's filing said. "Without the right to inspect the company's books and record he cannot fulfill that duty. Inspection is the director's primary tool to ensure that the company's management is acting in the best interests of the corporation and its stockholders."

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.