* Kazuo Okada, Steve Wynn have accused each other of bribery
* Wynn says Okada’s activities may violate U.S. law
* Wynn says internal investigation documented bribes
* Okada’s Universal says Wynn allegations tainted
* Okada has raised concerns about Macau donation
By Aruna Viswanatha and Farah Master
WASHINGTON/HONG KONG, Feb 21 (Reuters) - From undercover interns to hastily arranged meetings with heads of state, Steve Wynn’s lawsuit against former friend and partner Kazuo Okada seeks to paint a picture of a rogue board member pursuing his own private agenda.
Wynn’s accusations - which Okada and his Universal Entertainment, also named in the suit, vigorously deny - mark an escalation of tensions between Wynn Resorts Ltd’s chief executive and Okada.
Wynn Resorts said on Tuesday it was turning over evidence to U.S. authorities that it alleges shows Okada bribed foreign regulators and may have violated the U.S. Foreign Corrupt Practices Act.
A battle has been brewing in past weeks between Steve Wynn and Okada. It culminated with the Las Vegas tycoon forcibly buying back Okada’s 20 percent stake in Wynn Resorts at a steep discount, after producing a report that highlighted how the Japanese gaming mogul had engaged in “improper” activities.
Wynn Resorts organized a call with analysts on Tuesday to discuss its actions and its claims against Okada and Universal Entertainment.
“This company maintains a very high standard as it relates to compliance with the laws and the regulations upon which our licenses are granted,” board member Robert Miller, a former Nevada governor, said on the call, “based on the evidence, we took the steps that were necessary to protect the company.”
The self-made billionaires each claim the other made improper payments to win favor in Macau and the Philippines, where Okada is pushing a $2 billion casino project.
Universal Entertainment said in a statement emailed after Tuesday’s call: “The allegations leveled against Universal are motivated by self interest and represent the results of an incomplete and otherwise flawed corporate governance process in breach of the board’s fiduciary and other duties.”
In a lawsuit filed on Sunday, Wynn Resorts accused Okada of dozens of instances of impropriety, ranging from paying foreign regulators to advance his own agenda to misappropriating company assets and secrets for his own ends.
The lawsuit - which included a detailed report from a year-long internal investigation - fleshed out several details on how Wynn and Okada’s relationship rapidly soured. According to the lawsuit, things began coming apart after the Japanese investor, who made his fortune in slot-cum-pinball pachinko machines, began to pursue his Philippine project.
“By all measures, Okada’s abandonment of his duty of loyalty to Wynn Resorts commenced with his plan to develop gaming operations in the Philippines,” it read.
“Among other things, Okada arranged to have several people serve as interns at the Wynn Macau property so that Wynn Macau ‘know-how’ could be learned and siphoned from Wynn Resorts.”
In a pivotal moment in February of 2011, Okada told the company he had arranged a meeting between Steve Wynn and Philippine President Benigno Aquino. But the Vegas mogul, often credited with transforming the city into the family-oriented destination of today, declined to accept, embarrassing his partner who had to cancel the meeting.
Wynn Resorts shares gained 6 percent on Tuesday to close at $119.40.
Wynn and Okada’s spat burst into the public spotlight in January, when the Hong Kong-based businessman sued Wynn, intending to gain access to records surrounding a $135 million donation the company made to the University of Macau.
Okada, Wynn Resorts’ largest shareholder, sued Wynn Resorts in January for denying him information about the donation, which he called “inappropriate”. The U.S. Securities and Exchange Commission is looking informally into the issue.
Then over the weekend, Steve Wynn upped the ante by accusing him of making improper payments to foreign gaming regulators and forcibly buying back Okada’s 20 percent stake.
Universal said in its email on Tuesday: “The entire process has been tainted by the desire to serve Steve Wynn’s predetermined goal of removing Aruze USA as the largest stockholder of the company.
“Aruze USA intends to commence litigation which includes seeking a temporary restraining order and preliminary injunction to protect its interests in Wynn Resorts and prevent the redemption of its shares.”
Aruze USA is a subsidiary of Universal that owns the Wynn Resorts shares.
Wynn Resorts said in a statement on Sunday that Steve Wynn’s accusations were based on an internal probe led by Louis Freeh, a former director of the FBI.
The company said that it had waited until Freeh completed a report on the investigation before going to the U.S. Justice Department and the SEC. It said the report was presented to the company’s board on Saturday.
Wynn Resorts said the investigation had uncovered and documented more than three dozen instances over three years in which Okada and his associates engaged in “improper activities for their own benefit in apparent violation of U.S. anti-corruption laws”.
SEC spokeswoman Florence Harmon and Laura Sweeney from the Department of Justice both declined to comment.
Wynn said on the call with analysts that Wynn Resorts had also provided information to Nevada gaming regulators about its investigation.