GGRAsia – Universal Ent report says Okada engaged in fraud

Universal Ent report says Okada engaged in fraud

Sep 05, 2017 Newsdesk Japan, Latest News, Top of the deck

Gaming conglomerate Universal Entertainment Corp says an investigative report it commissioned into its former chairman and director, Kazuo Okada, found that the Japanese businessman was responsible for “three acts of fraudulence”.

The report – disclosed as part of a Monday filing by Universal Entertainment – concluded that Mr Okada (pictured) “committed these acts for his own personal benefit, and it can only be said that this is an extreme intermingling of private and public affairs and that there was a lack of a sense of ethics that one should naturally have as a director of a listed company.”

The Japanese conglomerate said it would now “proceed to examine the measures” that it should take against Mr Okada and Yoshinao Negishi. The latter was director and general manager of the administrative division of Universal Entertainment at the time of events, and was also allegedly involved in some of the wrongdoings by Mr Okada, namely by approving some of the tainted transactions.

“Additionally, based on the results of the investigation by the special investigation committee and its suggestions for measures to prevent the reoccurrence of the acts in question, going forward, the company will proceed to formulate and execute concrete measures to prevent that reoccurrence. Said concrete measures will be disclosed by the company once they have been decided on,” it added.

The company stated it did not expect that the results of the investigation on Mr Okada to have a negative impact on its performance for the current fiscal year.

Alleged wrongdoing

Universal Entertainment announced in early June that it had established an investigative panel to probe Mr Okada’s use of company money. Universal Entertainment said it had found three cases in which Mr Okada was suspected of misappropriating company funds.

One of the cases is related to a 2015 transfer of an HKD135-million (US$17.3-million) loan with no collateral and no interest from an entity called Tiger Resort Asia Ltd, a Hong Kong subsidiary of the group, allegedly for “personal use” of Mr Okada – namely the acquisition of artwork – and without the necessary approvals from Universal Entertainment.

In the second case, Mr Okada is suspected of withdrawing HKD16 million from a Tiger Resort Asia bank account in May 2015 using a company-issued cheque. “These transactions were conducted by Mr Okada at his own discretion without going through designated internal procedures,” Universal Entertainment noted in its Monday release.

A third case involves a February 2014 loan by Okada Holdings Ltd – a company said to be entirely owned by Mr Okada and his relatives, and of which the Japanese entrepreneur was the only director at the time of the reported loan. Mr Okada allegedly used a wholly-owned Universal Entertainment subsidiary – named Universal Entertainment Korea Co Ltd – to create a security interest for a US$80-million financing deal for Okada Holdings, without complying with Universal Entertainment’s internal procedures for such matters.

Mr Okada has previously denied any wrongdoing in any of the three cases.

The investigative report commissioned by Universal Entertainment concluded Mr Negishi had little power to stop Mr Okada’s actions, as the executive faced potentially being dismissed from his position or from the company entirely.

“It has been ascertained based on objective materials that in fact Mr Okada paid a visit to the home of [Mr Negishi] to violently intimidate and threaten him with respect to the subject matter of the investigation by the special investigation committee during the period of said investigation,” Universal Entertainment stated in its release.

The Japanese firm said on June 8 that it had suspended the leadership powers held by Mr Okada, accusing him of “a serious violation of governance”.

Mr Okada was ousted of Universal Entertainment’s board of directors at an annual meeting on June 29, when the firm’s shareholders approved a new slate of directors.

In July Reuters news agency reported – citing a court filing and an interview with Mr Okada – that he had filed a lawsuit in Hong Kong against his son, daughter and wife in an attempt to regain control of Okada Holdings, a Hong Kong-based firm said to hold a 67.9-percent stake in Universal Entertainment.

In July, Andrea Domingo, head of the Philippine Amusement and Gaming Corp, that country’s casino regulator, said the operations of the Okada Manila casino resort in Manila should not be affected by Universal Entertainment’s investigation into Mr Okada.

Universal Entertainment is the parent company of the operator of Okada Manila, Tiger Resort, Leisure and Entertainment Inc. Tiger Resort announced in June that it had removed Mr Okada as company chairman.