In what appeared to some to be a strong-armed move more reminiscent of an American Tribal gaming dispute than a legally overseen transfer of power, over 50 security personnel, local and federal police, city officials, and top business leaders took control of the US$3.3 billion Okada Manila casino resort on May 31, under the watchful eye of Philippines gaming regulator PAGCOR.
The deposed board of directors has filed lawsuits with one member, Tiger Resort Leisure and Entertainment Inc. (TRLEI) director, Hajime Tokuda, lodging complaints about illegal detention and kidnapping.
According to local media, Inquirer.net, the director was physically removed from his chair and “forced… down the lobby and into an unknown vehicle and was brought eventually to his house.” This, in the words of the ousted board’s counsel. The “hostile takeover” was similarly described in the report by members of the TRLEI or their lawyers as a “kidnapping that happened right in front of our eyes.”
Named in the complaints were Japanese Pachinko mogul and international casino entrepreneur Kazuo Okada, longtime political connectee Antonio “Tonyboy” Cojuangco, and former TRLEI CEA Dindo Espeleta.
TRLEI director and co-vice chair James Lorenzana and co-vice chair Michiaki Satate also filed complaints of “grave coercion” and “unjust vexations” claiming they were “manhandled” during the takeover on May 31.
The “changing of the guard” follows on a ‘status quo ante order’ issued in April by the Philippines’ Supreme Court. The order reinstated Okada as CEO of the casino after his ousting from Universal’s board in 2017, when directors accused him of misappropriating $20 million, a charge which he denied. The Supreme Court order came on the heels of a Court of Appeals ruling in January which dismissed embezzlement charges against Okada and one of his associates.
The Supreme Court’s decision was under appeal by Tiger Resorts, and according to its legal counsel, the Court’s April decision did not include any authorization to form a new board or to seize physical control of the property.
The ousted Michiaki Satate said at a news conference that the casino’s parent company would not honor any deals entered into by the new board and, “At this moment, it is an illegitimate board and set of officers who are running the business.”
The current management board denies any violence took place.
Regulator Adopts Neutral Stance
PAGCOR representatives were present at the takeover but have since said they were there simply to make sure operations continue smoothly.
Pagcor President Alfredo Lim said, “Our only concern in this corporate squabble between contending stockholders is that the operation is not disturbed.”
That was a 180-degree turn from a statement Lim made earlier in announcing plans to investigate the takeover: “I was shocked to read there was violence and intimidation.”
PAGCOR’s current position is one of providing stability to the market and maintaining a neutral stance while the matter is still before the courts.
The Tiger board has insisted since the earlier ruling that the order used by Okada to reassert authority over his former company is simply a temporary order and that since both TRLEI and its parent company, also originally created by Okada, are incorporated in other countries, Philippine law can’t determine ownership or control of the Japanese or Hong Kong entities.
Earlier in May, Tiger Resort said in a statement: “We believe TRLEI has a strong legal basis for the revocation of the status quo order. Our parent company, Tiger Resort Asia Ltd, a Hong Kong company, is a wholly-owned subsidiary of Universal Entertainment Corp, a Japanese company.
“The removal of Mr Kazuo Okada as chairman, chief executive, director, and nominal stockholder of TRLEI in 2017 was valid and legal. It was done upon the instructions of our parent company.”
No STranger to High-Stakes Struggles
Okada is no stranger to high-stakes struggles. In 2012 Wynn Resorts forced redemption of Universal unit Aruze USA’s stock at a 30 percent discount after accusing Okada of fraud. After Steve Wynn was forced from the board for social misconduct charges the corporation settled a years-old lawsuit with Okada for $2.6 billion in 2018.
However, earlier this year the U.S. Court of Appeals for the Seventh Circuit had to find for the defendant when Okada’s law firm that won him that award was forced to sue him to get paid. The appeals court upheld an arbitration panel award of $54.6 million to his former law firm. The settlement included a $963,000 sanction for costs and fees.
Okada Manila is currently valued at over $3 billion and sits on 108 acres beside Manila Bay. The casino holds some 3,000 electronic gaming machines and 500 gaming tables. It is the biggest casino resort in the country.
Source: Ousted board of Philippine casino sues Japanese tycoon Okada after resort seized, Reuters, June 6, 2022