Family helps oust Japan casino mogul Okada in boardroom coup

NEW YORK/TOKYO — Relatives of Japanese tycoon Kazuo Okada helped remove him as director of a Hong Kong investment company at the center of a sprawling gambling empire, according to corporate filings and people with knowledge of the matter.

Three sources said it was a rift with family members over money and control of the Hong Kong company that played the decisive role in Okada’s May 12 resignation as director of Okada Holdings Ltd. Okada Holdings owns 69% of Tokyo- listed Universal Entertainment Corp., a maker of Japanese-style slot machines and operator of a $2.4-billion casino in the Philippines.

The people spoke on condition of anonymity because the rift has not been made public.

One of those people, who was briefed by senior executives on the matter, said Mr. Okada’s son Tomohiro was upset with how his father was using Universal dividends allocated to Okada Holdings.

That included, the son believed, purchasing pieces for Mr. Okada’s art museum in Hakone, a resort town near Tokyo.

Universal said it was not in a position to comment on the changes at its top shareholder.

Attempts to reach Mr. Okada at his address in Hong Kong were unsuccessful. David Krakoff, his lawyer in an unrelated US lawsuit, did not respond to e-mails and calls seeking comment.

The sources did not provide details of how Mr. Okada’s family helped oust him as director of Okada Holdings.

His resignation was confirmed in a corporate filing in Hong Kong.

Mr. Okada’s son Tomohiro holds 43.5% of Okada Holdings and his daughter Hiromi holds just under 10% —together enough to have the majority of shares needed to remove him under the terms of the company’s founding documents. Reuters was unable to determine if Mr. Okada’s wife Takako, who owns a stake of less than one percent, played any role in the changes. Tomohiro, Hiromi and Takako did not respond to letters sent to addresses listed in public documents.

Mr. Okada is set to lose his post as chairman of Universal after the company recently announced a slate of directors that omitted him — a move Universal said had the blessing of Okada Holdings. Shareholders will vote on that list of directors, which includes the reappointment of Takako, at Universal’s annual meeting today.

Mr. Okada was also recently dropped from the board of the company running Universal’s casino on Manila Bay.

The boardroom shake-up was orchestrated in part by Universal President Jun Fujimoto, a company veteran whose relationship with Mr. Okada has grown increasingly strained over the years, according to people with knowledge of the recent changes and the relationship between the two men. Mr. Fujimoto, who is in charge of Universal’s profitable business of developing pachinko and pachi- slot gambling machines for the Japanese market, has questioned Mr. Okada’s costly push into the Philippine casino market, the sources said.

Universal denied there was such tension between Mr. Fujimoto and Mr. Okada.

In response to other questions it referred to a recently launched internal investigation into Mr. Okada’s alleged misuse of company funds and noted that it had added an outside director in an effort to bolster oversight. “We are taking steps to further strengthen corporate governance,” Universal said in an e-mailed response.

Universal announced this month it was probing an alleged misappropriation of $ 20 million by Mr. Okada and another director. Mr. Okada has not commented on the allegations.

While out as director of Okada Holdings, Mr. Okada still owns a 46.4% stake in the company and retains a grip over other parts of his empire, including a 100% stake in Aruze Gaming America, which makes slot machines and is licensed in several US states.

Separate from the recent allegations, Mr. Okada and his firms have been under Federal Bureau of Investigation (FBI) investigation over a $40-million payment to a Manila-based consultant in 2010. The FBI probe is focused on whether the payment was aimed at helping Universal gain tax and ownership concessions for the casino from the Philippine government, according to people with knowledge of the matter.

Universal and Mr. Okada have denied wrongdoing and filed a defamation suit against Reuters in 2012 for its reporting on the payments. The Tokyo District Court ruled in 2015 that Universal’s case was without merit. Last year the Tokyo High Court upheld that ruling, dismissing Universal’s appeal. Universal has appealed to Japan’s Supreme Court. —