By Sue Zeidler
LAS VEGAS, Oct 2 (Reuters) - A Nevada judge on Tuesday ruled against Japanese billionaire Kazuo Okada’s effort to reverse a forced redemption of his 20 percent stake in Wynn Resorts Ltd , rendering him unable to vote at the casino company’s Nov 2 annual meeting.
The high-stakes legal battle pits Okada - formerly Wynn’s largest shareholder through his Universal Entertainment Corp’s Okada’s Universal Entertainment Corp Aruze USA subsidiary - against Wynn CEO Steve Wynn. Each billionaire accuses the other of making improper payments in their respective Asian markets.
In February, Wynn dramatically and forcibly bought back Okada’s stake, valued at $2.7 billion, at a 30 percent discount after an internal probe by former FBI director Louis Freeh revealed Okada had allegedly violated U.S. anti-corruption laws.
Representatives for Okada and Aruze, who had sought to nominate two board members at the Nov. 2 meeting if they were successful in motion for a preliminary injunction, said on Tuesday, they were considering an appeal.
“We are disappointed by this decision, which for the moment denies Aruze USA of its rights to nominate and vote for independent directors willing to stand up to Steve Wynn,” the company said in a statement.
The court on Tuesday did rule in favor of Okada on another motion to gain access to Wynn records pertaining to a suit in which he accuses Wynn Resorts of inappropriate payments related to its $135 million to the University of Macau Development Foundation.
Robert Shapiro, an attorney for Wynn, said he was pleased the judge agreed with the company’s position regarding the forced redemption and called the other ruling regarding records “procedural.”
“We are confident we will prevail,” he added, calling the second ruling over documents “procedural.”
Even though Okada has been stripped of his shares, Okada still remains a board member of Wynn Resorts and can only be removed by a shareholder vote, according to company officials.
Kim Sinatra, also an attorney for Wynn, said on Tuesday that Wynn will hold a special shareholder meeting at some point in the future to vote on removing Okada, but would not give a date.
“It’s too early and it’s complicated,” she said, noting that Okada has already been removed from boards of Wynn subsidiaries such as Wynn Macau Ltd.
Wynn has argued its actions were justified because Okada’s alleged payoffs to regulators at the Philippines Amusement and Gaming Corp (PAGCOR) were potential violations of the Foreign Corrupt Practices Act (FCPA), therefore threatening Wynn’s standing with gaming regulators in Nevada and Macau.
In August, Okada filed a defamation lawsuit in Japan against the casino company related to the forced redemption of his shares in February.
Okada claimed $140 million (11.2 billion yen) in damages, alleging Wynn’s actions led to a fall in Universal’s stock price and new business opportunities, and damaged his reputation.
The case is Wynn Resorts Ltd vs Kazuo Okada, an individual, et al, U.S. District Court, Clark County, Nevada, No. A-12-656710-B