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Steve Wynn asks judge to oppose top investor’s suit as legal battle heats up...
Steve Wynn’s Wynn Resorts recently urged a US court to reject legal claims made by its largest shareholder, adding fire to an escalating public discord that could impact the future control of the US$15-B casino giant.
In a 117-page filing with the Clark County District Court in Nevada, Mr. Wynn stated that Kazuo Okada, who holds a 20% stake in the firm, was “utilising innuendo, hyperbole, half-truths and sweeping generalisations” in his legal petition that was filed on 11 January.
Mr. Okada, Wynn’s longtime business partner, known for his close relationship with Mr. Wynn, sued the Company for denying him access to Key financial information and has objected to an “inappropriate” UDS$135-M company donation to the University of Macau.
The Japanese businessman owns more than twice the stake of Wynn Resorts stock than Mr. Wynn himself.
Mr. Okada filed his suit through Aruze USA Inc., a unit of his Universal Entertainment Corp, an arcade-game manufacturer and developer of a multi-billion-dollar casino in the Philippines.
Responding to last Monday’s filing in Nevada, Mr. Wynn stated that Nevada law did not give Mr. Okada the right to inspection of the company’s bookd, and his requests were “nothing more than stockholder inspection requests, on behalf of Aruze.”
“Nevada law does not afford Mr. Okada or any other individual director the right to do an end run around the express statutory limitations on stockholder inspection rights, or to play detective, while unnecessarily distracting and burdening Wynn’s management with the endless task of satisfying his unfounded and unarticulated ‘concerns’,” the filing said.
Wynn’s donation to the University of Macau in Y 2011 was approved by the boards of Wynn Resorts and Wynn Macau on 18 April last year, with Mr. Okada the only member of the 12-person board objecting to the payment, according to the filing court filings.
Aruze USA said that as a member of the board of Wynn Resorts, Mr. Okada had the right to inspect the corporate documents he deemed necessary to carry out his duties as a Director.
“The response of Wynn Resorts’ management, while full of colorful rhetoric, cannot explain this away. We look forward to presenting our position to the Court,” Aruze said.
Mr. Okada, a Hong Kong resident who made his fortune in Japanese pachinkos, has also proposed 4 potential candidates for election ahead of Wynn’s Y 2012 shareholder meeting.
If these are endorsed, the Japanese businessman would be pushing out high level executives including Wynn’s Chief Operating Officer Marc Schorr and Linda Chen, President of Wynn International Marketing, whose terms expire this year.
Steven Wynn, creator of the volcano-roaring Mirage and lavish Bellagio in Las Vegas, upset shareholders more than 12 yrs ago with overzealous spending on items including his US$200-M art collection, eating into profitability of Mirage Resorts at the time.
Mr. Wynn, like Las Vegas and Macau rival Sheldon Adelson of Las Vegas Sands, has expressed interest in cementing his presence in emerging Asian gaming markets such as Japan and South Korea should legalization allow in the future.
Mr. Okada, who has been investing in Wynn Resorts since Y 2000, is seen as Key to the Company’s potential casino development in Japan due to his vast business links and contacts.
Japan is a market that analysts say would be highly lucrative and could generate revenues of over US$40-B a yr.
It is thought that this negative relationship issue with Wynn Resorts will probably press Mr. Okada to develop a relationship with another US casino gaming company. Certainly Las Vegas Sands has been very aggressive in their desire to do something in Japan, and the expectation is that many large corporates will reach out to Mr. Okada’s organization.
Revenues from Wynn’s property in Macau, the World’s largest gambling destination, accounts for 70% of Wynn Resort’s total revenues, and the Company currently does not have a presence in the fast-growing Singapore market, where LVS has developed 1 of the World’s most profitable casinos. Stay tuned… (Credit: Paul A. Ebeling, Jnr - Live Trading News)
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