By order of the Philippine Department of Justice, a new board has taken control of Okada Manila, an integrated resort (IR) in the Philippines’ Entertainment City casino zone.
Several board members, who were evicted during a tense takeover of the property this spring, have been reinstated, including President and CEO Byron Yip and Tokako Okada, ex-wife of Kazuo Okada, the architect of the takeover for whom the IR is named.
In 2017, the Japanese billionaire was ousted from the empire he founded amid charges of embezzlement. He returned to power May 31, following a status quo ante order (SQAO) handed down by the Philippine Supreme Court. That order required Tiger Resort Leisure & Entertainment Inc. (TRLEI), parent of Okada Manila, to restore the board to its 2017 incarnation, when it was still under Kazuo Okada’s control.
While Okada remains as chairman, director, stockholder and CEO of TRLEI, those who accompanied him in the takeover have been shown the door. Antonio O. “Tonyboy” Cojuangco, Dindo A. Espeleta, Maximo Modesto Joel C. Flores, Tetsuya Yokota and Hiroshi Kawamura may not enter the property and must stop disbursing casino funds until they prove their right to regain their posts.
Additionally, the Philippines’ Court of Appeals has since denied a petition from Okada to regain control of the TRLEI board, citing a lack of authority. The court refused to grant a temporary restraining order that would have halted the shake-up.
The resolution of the matter was welcome news for Jason Ader, chairman and CEO of special purpose acquisition company (SPAC) 26 Capital. Ader still plans to merge the SPAC with Okada Manila and list the entity on NASDAQ, enabling the new company to raise capital and expand in the Philippines and across Asia. The merger will give Universal Entertainment Corp. (UEC), parent of TRLEI, approximately 88 percent of the combined company and infuse the IR with up to US$275 million in cash.
“We are very happy with the outcome” of the recent shakeup, Ader told Asia Gaming Brief. “I’ve always had the view that the status quo ante order never gave the Kazuo Okada group the ability to do what they did … Now Universal is back in control of the operations. Byron Yip is back in control. Universal is my partner in our planned merger on NASDAQ. So the focus is getting our merger complete. That’s the top priority.” He expects the merger and listing to conclude by the end of the year.
According to GGRAsia, the new board was approved by the Philippine Amusement and Gaming Corp. (PAGCOR) following the DOJ order. It introduces board member Kenshi Asano, director of Tiger Resort Asia Ltd. (TRAL), which owns 99.9 percent of TRLEI, along with Hajime Tokuda, Hans Van Der Sande, Toji Takeuchi, James Lorenzana, Kenji Sugiyama and Mitsukazu Nakata.
In a statement, the reconstituted board said it “looks forward to the full resumption of normality at Okada Manila,” and also “looks forward to Mr. Kazuo Okada’s participation in the scheduled board meeting in compliance with the SQAO and PAGCOR order.”
But Okada’s camp isn’t happy, and claims that the latest order was “a brazen attempt” to defy the SQAO. “The PAGCOR board expeditiously came up with a cease-and-desist order that is merely based on the opinion of Justice Secretary Jesus Crispin Remulla and not from a proper court of law.”
In fact, the Supreme Court, while ordering Okada’s return to TRLEI, did not empower him to form a new board or act as TRLEI representative.
According to UEC, Kazuo’s disgruntled crew made a last-ditch effort to sabotage the transition by disabling the hotel’s elevators.
“There is also CCTV video footage of the Kazuo group shredding documents in hotel room 866, which was being used as an executive office, and employee Gilbert Giazon removing boxes of documents from the property,” UEC stated.
Asano said TRAL would heed the PAGCOR order for now, recognizing Kazuo on the TRLEI board. He also pointed out that Okada is still accused of embezzlement in the Philippines and is subject to further action by the Supreme Court once the Court of Appeals submits its findings.
“We believe that the order from the PAGCOR affirms our position in the intra-corporate dispute in Okada Manila,” he said. “It is consistent with both the letter and spirit of the SQAO of the Supreme Court. We are hopeful that both the High Tribunal and the Court of Appeals will agree and this issue can be put to rest very soon.
“While we have successfully retaken control over the management and premises of Okada Manila, we will remain focused on resolving this matter with finality. A favorable outcome will help the Philippines regain the trust of international investors.”
TRLEI posted a quarterly revenue gain of 40 percent in the second quarter over the first quarter.
Now it’s full speed ahead for Ader, who said he looks forward to “more capital provided for new integrated resorts, new developments, and new multibillion-dollar projects in what is proven to be now the fastest growing and most exciting area in Asian gaming.”
As for the leadership battle and its settlement, he added, “I hope, for the Philippines, this has been a constructive experience, a learning experience.”
