Japan’s Universal Entertainment Corporation has announced an “organizational realignment” aimed at preventing former Chairman Kazuo Okada from having any involvement in its casino-related businesses.
In a press statement issued on Monday, Universal revealed that it had established a new company, Limited Liability Company ABC, which is set to become the parent company of its three primary casino-related businesses, namely Tiger Resort Asia Limited, Aruze USA, Inc. and another new entity called UE Technologies Inc.
Universal also unveiled its plans to commence “the full-fledged manufacture and sales of casino-related devices” including Player Tracking Systems, multi-currency bill validators and fully automatically-managed casino tables and casino machines through UE Technologies, which will become a US subsidiary.
Outlining the reasons for its organizational realignment, the company said, “In acquiring and maintaining licenses for casino-related businesses in the various states of [the United States], members of management and shareholders must undergo strict screenings of suitability conducted by the gaming commission serving as the regulatory authorities.
“In cases where unsuitable individuals are present among management or shareholders, there is a risk of being unable to acquire a license to begin with, or a license that is already held being invalidated.
“Given that, as part of preparations to secure the structure to execute business at the casino-related businesses … without being affected by a shareholder of the company’s parent who has been cited as violating governance and compliance (Okada) even should this unsuitable individual assumes the post of director at the company or its parent, the company has decided to conduct an intra-group organizational realignment for those casino-related businesses.”
Limited Liability Company ABC is currently 100% held by Universal subsidiary WonderGraph CORP with Universal set to acquire directly all of the issued share capital in Limited Liability ABC. The company lists WonderGraph CORP as operating its casino resort business.
Okada was kicked off the boards of both Universal Entertainment Corp and Tiger Resort Asia Limited (TRA) last year amid accusations he had committed three acts of fraud involving TRA funds.
TRA later filed damages suit against Okada with the Tokyo District Court and the High Court of the Hong Kong SAR.
Last month Universal revealed that it had also decided to file criminal complaints and civil lawsuits against Aruze Gaming America, Inc (AGA) and Okada seeking compensation of damages for violating patent and other rights.
The suits have been filed in four separate jurisdictions – the United States, Macau, the Philippines and Hong Kong – with Universal claiming that AGA had “illegally used patents on gaming machines belonging to the company to conduct the sales of gaming machines” in each jurisdiction. Universal had previously filed a patent infringement lawsuit against AGA and Okada in March but “has decided to file criminal complaints and civil lawsuits based on violation of its patent rights and other rights against AGA Group companies and Kazuo Okada.”
Okada is still under investigation by Nevada regulators for his alleged involvement in fraud activities for personal benefit that negatively impacted Universal.
In March, Universal and Aruze USA reached a settlement with Wynn Resorts, of which Okada also used to sit on the board, which saw Wynn Resorts pay more than US$2.5 billion to end ongoing litigation between the parties. That settlement is related to the forced redemption by Wynn in 2012 of shares owned by Okada and Aruze USA worth almost US$2.8 billion. Wynn claimed at the time that Okada had put Wynn’s gaming license in jeopardy amid allegations he provided improper hospitality at Wynn properties to Philippine gaming officials to the tune of US$110,000.
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