Wynn Resorts is suing hedge fund short-seller Jim Chanos for slander, claiming he falsely accused the Macau and Las Vegas casino giant of violating the US Foreign Corrupt Practices Act.
Bloomberg reports that the complaint, filed in US District Court in San Francisco, was prompted by remarks made by Mr Chanos, who founded and heads New York-based Kynikos Associates. It alleges he told an audience at a recent invitation-only event in California that Wynn and its Chairman Steve Wynn violated the act, which outlines the legal framework under which a US-based or listed company can be prosecuted for bribing officials of foreign governments.
Wynn famously removed Kazuo Okada from its board of directors and bought out his substantial shareholding following an in-house investigation that concluded the Japanese machine gaming magnate had made improper payments to influential people in the Philippines to clear a path for a multibillion-dollar resort casino his companies are pursuing in Manila.
In the course of that dispute, which is still in litigation, Mr Okada questioned the propriety of a US$135 million donation Wynn Resorts made to the University of Macau at a time when the company was seeking Macau government approval to expand in the city’s Cotai resort district. That prompted US authorities to investigate the donation.
“Wynn and Wynn Resorts have been thoroughly investigated in a public manner on numerous occasions by entities such as the Nevada Gaming Control Board, the Massachusetts Gaming Commission, the Securities and Exchange Commission, and other government agencies,” the company said in the complaint. “At no time has any official agency suggested that there is any reliable evidence that plaintiffs, or either of them, have violated the Foreign Corrupt Practices Act.”
Mr Chanos, whose fund specializes in short-selling, argues that China’s economy is overheated due to its dependence on property development for growth.
He declined to comment on the lawsuit, according to Bloomberg.
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