A plan to list Philippine integrated resort (IR) Okada Manila on the NASDAQ has been delayed by three months, from June 30 to September 30, following the May 31 takeover of the property by Kazuo Okada.
In 2017, Okada was ousted as head of the parent company Universal Entertainment, and its subsidiary, Okada Manila operator Tiger Resort, Leisure & Entertainment (TRLEI), on charges that he embezzled $3 million in company funds. Ever since, the Japanese billionaire has been fighting to regain control of the companies he founded.
Universal announced in 2021 that it planned to obtain the listing through a merger with a special acquisition company (SPAC), 26 Capital, controlled by activist investor Jason Ader, as reported by Asia Gaming Brief. Due to the takeover, Universal pushed back the deadline for the merger so it could update information in a registration statement that’s already been filed with the Securities and Exchange Commission (SEC). The update would include subsequent developments and news of potential risks.
In May, the Philippines Supreme Court agreed with Okada that he should be restored as chairman and CEO of the group. After that, the existing management was forcibly evicted, though Okada’s petition is not yet final. Since then, TRLEI has appealed to the court to reconsider its ruling. It also filed criminal charges against the new management group, accusing them of physical violence during the takeover, according to AGB.
A release from TRLEI stated, “Kazuo Okada purportedly led a meeting on 2 May 2022 installing himself, Antonio Cojuangco, Dindo Espeleta, Manuel Lazaro, Yoshinao Negishi, Takahiro Usui, Kengo Takeda, Steven Wolstenholme, Tetsuya Yokota, Hiroshi Kawamura, and Maximo Modesto Joel C. Flores, as the new board of TRLEI.”
It said the “sham board was ‘irregularly elected’ and that the proposed general information sheet containing their election was ‘invalid.’”
Meanwhile, Okada Manila, in the capital’s Entertainment City casino zone, is reportedly enjoying 90 percent hotel occupancy during weekdays, with an even higher rate on weekends.
“With the property’s operations in full gear and abuzz with activities, Chairman Okada plans to sustain the positive gains that Okada Manila has achieved so far,” said a statement from Okada’s team. “He also revealed that he still has more amazing plans for Okada Manila that will bring Okada Manila to greater heights of success during the second half of 2022.”
The transaction with Miami-based 26 Capital will provide Okada Manila with $275 million in cash for further expansion. On completion, Okada’s parent company Universal Entertainment will own 88 percent of the merged entity, which will be listed on the NASDAQ.
According to the Manila News, 26 Capital Acquisition Corp. is already listed on NASDAQ.
In the letter to the SEC, Tiger Resort Asia Ltd. (TRAL) said the “legitimate officers” of TRLEI say the election of “the sham board” is invalid.
“No notices of meeting were sent to TRLEI’s stockholders by the corporate secretary as provided in the by-laws; and it was held without the participation of the majority shareholders holding 99.9 percent ownership of the shares,” said the statement.
TRLEI’s corporate secretary also attached an affidavit indicating that she “did not issue or send out a notice to any of the stockholders of TRLEI in relation to a stockholders’ meeting purportedly held on 2 May 2022.”
TRLEI has filed an “extremely urgent manifestation” to the Supreme Court asking it to declare the Kazuo Okada board void. “We are calling on all government bodies and agencies to only deal with the legitimate board of TRLEI,” said director Hajime Tokuda.
Meanwhile, according to Forbes, 26 Capital expects to complete its merger with Okada Manila.
“I’m fully committed to this deal,” said Ader on June 9. Once approved, Ader said Okada Manila will list under the UERI ticker.
“It’s a fluid situation,” Ader said. “Our lawyers are watching the developments closely. We’re moving forward with the plan to close the deal. We’re not going to let Kazuo Okada disrupt the biggest listing of a Philippine business on either the New York Stock Exchange or NASDAQ.”
