Tokyo’s High Court has dismissed an appeal by Japanese billionaire Kazuo Okada to toss out a lower court ruling against him in February. At that time, Tokyo District Court ordered Okada to pay JPY21.3 million (US$204,000) in damages to Universal Entertainment Corp, the conglomerate he founded, which ousted him in 2017 due to “three acts of fraudulence” in relation to the company’s accounts, regarding certain payments he ordered should be made by entities of the group.
The high court ruled that “the claims of Mr. Okada were objectively contrary to the facts and as such inadmissible, while also fully recognizing the claims of the company,” said Universal Entertainment in a September 18 filing.
Okada was ordered to pay 5 percent per year interest on the award dating back to December 2017, “until the amount is paid in full,” according to the filing. Okada has denied any wrongdoing.
Universal Entertainment is the parent company of the promoter of the Okada Manila casino resort in the Philippine capital Manila.
In July, a press release from Okada Manila stated that a court ruling in Japan had effectively blocked Okada from returning to the board of either Universal Entertainment Corp, or the subsidiary that controls the casino property, for up to 30 years, reported GGRAsia.
The billionaire has been embroiled in a longstanding legal battle, including litigation against immediate family members, to wrest back control of Universal, which operates the Okada Manila integrated resort, named for the former owner, in the Philippine capital.
According to the statement, “the Tokyo District Court, acknowledging that the fraudulent acts were conducted under the order of Mr. Okada, also acknowledged that Mr. Okada breached both his duty of care of a good manager and his fiduciary duty of loyalty as a director of the company, and accepted all claims of the company.”
Universal and its subsidiary Tiger Resort Asia have been seeking damages from Okada on claims that he fraudulently transferred company resources to personal accounts. Okada was appealing against a February verdict which ordered him to pay nearly US$200,000 to his former company.
Okada was removed as the leader of Universal in June 2017 and the damages suit was originally that November.
In related news, according to Inside Asian Gaming, Universal, the parent company of Okada Manila operator Tiger Resort Leisure and Entertainment (TRLEI), has announced plans for a consent solicitation that will allow it to replace existing notes to the value of US$600 million and due in 2021 with new notes due 2024, while also raising an additional US$100 million in capital.
Under the consent solicitation, which requires the approval of 100% of existing notes holders, the terms of the existing US$600 million notes would be amended to mature on 11 December 2024, while maintaining an interest rate of 8.5% per annum. TRLEI and Tiger Resort Asia Limited (TRAL) are named as guarantors.
If Universal can’t acquire approval from 100 percent of notes holders, it will look to implement an exchange offer under which it would replace outstanding existing notes for new notes while amending its original Note Purchase Agreement to eliminate certain covenants and restrictive provisions relating to the existing notes. The company said it would need 75 percent of holders to confirm their approval to proceed with the exchange offer.
The consent solicitation and the exchange offer will serve to delay substantial repayments for Universal but won’t raise any additional proceeds.
However, Universal said it will also launch an offer of US$100 million in additional notes which will constitute part of the same series as either the amended existing notes offer of the exchange offer, due 11 December 2024.
“The company intends to use the cash proceeds from such sale of additional notes for general corporate purposes,” it said.
Universal recently reported a profit of JPY12.67 billion (US$120.1 million) for the first six months of 2020 thanks to strong sales of new pachislot titles in Japan. However, the results weren’t so positive for Okada Manila where net sales declined 48.8 percent to JPY16.10 billion (US$152.6 million) with an operating loss of JPY5.27 billion (US$49.9 million).
