By Nathan Layne and Joseph Menn
TOKYO/SAN FRANCISCO, July 19 A director of
Universal Entertainment Corp altered minutes of a
meeting of executives at the Japanese gaming machine maker to
show they had approved a $25 million payment that is under U.S.
investigation as possible bribery, a report commissioned by the
The report says that around October 2012 Hajime Tokuda
altered minutes of a November 2009 meeting to show a decision to
make the $25 million payment was made by a board of executive
The original minutes made no mention of the payment,
according to copies of the report and the minutes seen by
Reuters. The minutes were listed as an attachment to the report,
which was completed on June 21 this year.
Tokuda was concerned that a lack of documentation showing
the company's official decision-making body had authorised the
payment would be discovered in the course of litigation between
billionaire Universal founder Kazuo Okada and Wynn Resorts
, the report says.
Tokuda, who was president of Universal at the time of the
payment and who has been working closely with Okada and the
board in responding to the Wynn suit and the bribery
allegations, "feared that it would be detected. This led him to
altering the minutes after the fact," the report says.
Universal, which has filed a defamation suit in Tokyo
against Reuters for its reporting on payments related to its $2
billion casino project in Manila, declined to comment. Tokuda
also declined to comment.
The report was compiled by a former high-ranking police
official and two lawyers in Japan who were hired by Universal to
investigate a total of $40 million in payments in 2010 to a
politically connected consultant around the time the company
lobbied for concessions for the planned casino resort.
Last month, Universal released a summary of the report,
which concluded that there was no evidence to support
allegations of bribery. It was critical of the company's
governance though, blaming a lack of oversight of its overseas
operations for allowing payments to be made in error.
The summary version of the report also said the minutes of
the November 24, 2009 meeting had been altered but it did not
disclose details such as who created the document and when it
The authors of the report - Yoshiyuki Kaneshige, a former
police agency official who now heads a management
consultancy, and attorneys Teruki Uchida and Takujiro Hamada -
did not return calls seeking comment.
In the report, the authors said their findings were based on
incomplete information, noting that they had yet to speak to key
people involved in moving the money. Universal said last month a
second committee would be convened to investigate further.
FULL REPORT PROVIDED TO REGULATORS
By October 2012, when the report says Tokuda altered the
minutes, the U.S. Federal Bureau of Investigation and the state
gaming regulator in Nevada, where Universal has a gaming
licence, had begun to investigate the $25 million as part of $40
million in payments the company made to the consultant, Rodolfo
"It raises a lot of questions here," said Nicholas Benes, a
corporate governance expert and head of the Board Director
Training Institute of Japan, referring to the existence of
altered minutes. "What makes you wake up three years later and
decide you need to change documentation of this meeting?"
Universal has provided the unabridged report to the Osaka
Securities Exchange, part of the Japan Exchange Group which
oversees Universal's stock listing, a person familiar with the
matter said. A spokesman for the Japan exchange declined to
The Nevada Gaming Control Board confirmed it had received
the report. "We do have that report. It's another piece that we
will have to review," board chairman A.G. Burnett said. "I don't
have any comment on the substance."
Universal filed lawsuits last year against three former
employees, claiming they transmitted $15 million of the $40
million without authorisation. Universal told Reuters in March
the $25 million payment had been made in error and that it did
not know how the money was ultimately used.
The company has said management was misled into believing
there was a need to pay $25 million to acquire lots of land
reserved for road use where it is building the casino, unaware
the "road lots" had been obtained for free in an agreement
signed by a Philippine subsidiary on November 27, 2009.
The first set of minutes of the November 24, 2009 executive
meeting makes no mention of a payment or the road lot issue. The
second set, which the report says was created by Tokuda in 2012,
lists a 2.5 billion yen payment - approximately $25 million -
for road lots as a matter to be resolved by the executive
officers. Both sets are listed as attachments in the report.
The minutes that the report says were altered carry the
personal seals of six of eight attendees including Tokuda,
current Universal President Jun Fujimoto and Masayuki Sano, head
of legal affairs. The document is missing the seals of two
executive officers who are no longer with the company.
Personal seals are a common way for corporate executives to
officially approve important documents in Japan. Universal
declined to make Fujimoto or Sano available for comment.
The report did not address whether Fujimoto, Sano and the
other officers whose seals were on the document had approved the
creation of new minutes in 2012. The authors say the evidence
they gathered suggested a resolution to make the payment was
made at a separate meeting of executives attended by Okada,
Soriano and others in early December 2009 two days before the
money was sent.
The FBI is involved because the money originated from a
U.S.-based Universal subsidiary. The U.S. Department of Justice
said in April that Universal was the target of a criminal
investigation for possible bribery.
Universal, which sells slot machines to casinos in the
United States, announced a day before its annual meeting in June
that Tokuda would not be a candidate for the board because of
unspecified personal reasons.