‘Okada case’ blots PH image as investment place

On Aug 15, 2022

THE unresolved management and ownership row at the famed Okada Manila Resort and Casino in Parañaque City, is causing a blot in the Philippines’ image as a stable investment destination.

This was the warning given by Atty. Estrella ‘Star’ Elamparo, senior partner at the Divina Law and legal counsel of Tiger Resorts and Leisure Entertainment, Inc. (TRLEI), which manages and operates the 44-hectares, $2.2 billion, integrated hotel and casino.

The investors’ apprehension was fueled by a ‘status quo ante order’ (SQAO) issued by the Supreme Court last April 27, 2022 that returned Kazuo Okada as chairman and CEO (chief executive officer) of TRLEI.

Prior to this, in June 2017, Okada and his chief operating officer (COO), Takahiro Usui, were ousted from the TRLEI board after they were accused of “misappropriating TRLEI funds,” according to an article by ‘Asia Gaming Brief’ (Supreme Court orders Kazuo Okada to be restored as Tiger Resorts CEO | AGB (agbrief.com), one of the many industry news sites that has been following the so-called, ‘Battle for Okada Manila.’

His removal from TRLEI amidst accusation of financial misdeeds came barely a year after Okada Manila’s formal inauguration last December 16, 2016.

Following the release of the SQAO and using it as its legal basis, the group of Okada led by Antonio ‘Tony Boy’ Cajuangco, one of the country’s oligarchs and, Dindo Espeleta, forcibly and physically took over the management of Okada Manila last May 31, 2022.

Cojuangco is a business partner of Okada thru the former’s ‘All Seasons Hotel and Resorts’ while Espeleta’s Transasia Construction Development Corporation is the main contractor for Okada Manila.

Both are now board members of Okada Manila, with Cojuangco as president—despite not owning one single stock of TRLEI shares, which is legally questionable, said Elamparo.

The scandalous incident surrounding the takeover is now the subject of several criminal complaints, including kidnapping, now pending at the Department of Justice (DOJ), bared Elamparo during the ‘Meet the Press/Report to the Nation’ media forum of the National Press Club (NPC) last August 12, 2022.

Okada: a controversial personality

According to various (reliable) accounts, Okada, born October 3, 1942, finished vocational engineering and made his way up the international gaming ladder by manufacturing coin-operated ‘pachinko’ machines in Japan (he is known as Japan’s ‘Pachinko King’) and graduated to making slot machines that became popular in Las Vegas that he sold thru his company, ‘Universal Lease’ and which is now known as ‘Universal Entertainment Corporation (UEC).

A picture of Kazuo Okada sourced from the Internet. While SQAO of the SC ordered his return as the CEO of TRLEI that operates Okada Manila, lawyer Estrella Elamparo said Kazuo has not physically showed up at Okada Manila but instead appointed his local business partners to manage the casino/hotel who are not covered by the SQAO or shareholders of TRLEI.

Okada continued his rise after partnering with Las Vegas tycoon, Steve Wynn, where he became Wynn Resorts’ vice chairman based in Nevada. Together, they also opened another hotel/casino in Macau.

But by 2011, Okada had a falling out with Wynn who accused him of “bribing” Philippine gaming officials (Philippine Gaming Corporation, PAGCOR) in order to get the go-ahead for the establishment of Okada Manila. In 2012, Okada was removed from the board of Wynn Resorts.

Wynn also accused Okada of building Okada Manila that would directly compete with Wynn Resorts in Macau, although Okada claimed that he first asked Wynn to join him in the Manila project.

According to news reports, in May 2017, Okada was removed by the board of Okada Holdings, Limited (OHL), the ultimate holding company that owns TRLEI and Universal Entertainment and by extension, Okada Manila.

The next month, he was also removed from the board of UEC and TRAL. The next year, in August of 2018, Okada was arrested and detained in Hongkong by the former British colony’s Independent Commission Against Corruption (ICAC) over the complaint of corruption and conspiracy to defraud OHL filed by UEC. Both OHL and TRAL are based in Hongkong.

But early in 2019, Okada was set free and the bail he posted returned to him.

Elamparo explained that TRLEI, which operates Okada Manila, is “99.99 percent owned” by Tiger Resorts Asia Limited (TRAL), an asset management company based in Hongkong.

TRAL, in turn, was owned by UEC, a publicly listed company in Japan originally founded by Okada.

With Okada’s removal from OHL, UEC, TRAL and TRLEI, Elamparo noted that Okada has lost his legal personality as chairman and CEO of Okada Manila, the SC SQAO, notwithstanding. She explained that TRAL, which owns TRLEI, “was never a party” to the suit filed by Okada after his removal in 2017.

As such, Elamparo averred that TRAL’s ownership and control of TRLEI/Okada Manila is not covered by the SC decision.

Okada, for his part, said he was a victim of a “conspiracy” by people (his children and wife included) who had “betrayed” his trust and that the accusations against him were “all trumped up charges.”

The ownership structure of Okada Manila, showing Kazuo Okada as minority shareholder of the parent company, Okada Holdings Limited that resulted to his being ousted from his post as TRLEI chairman and CEO in 2017. TRLEI is the owner of Okada Manila.

Okada contested his removal from TRLEI before the Parañaque Regional Trial Court but his complaint was junked in December 2018, with the court noting that since the incident of his removal was an intra-corporate dispute involving the election of corporate officers, his appeal was filed beyond the regulatory period of 15 days. Okada then ran to the Court of Appeals but his appeal was also dismissed, said Elamparo.

A son’s appeal to his father

With the SQAO at his side, Okada and his partners, Cojuangco, Espeleta and their own ‘management team’ at Okada Manila, have managed to dodge the accusation of “forgery of public documents” filed against them by TRLEI before the Makati Prosecutor’s Office.

Mainstream media reported that in a ruling last July 29, 2022 but only made available to the public last August 8, 2022, Prosecutor Kristina Carmela So-Reyes said there was no probable cause to elevate the complaint to the court as there was “no deception” on the part of the Okada faction when they wrote several banks regarding the new authorized signatories for Okada Manila’s bank accounts.

Part of the SQAO directed TRLEI TO “MAINTAIN THE STATUS QUO prevailing prior to petitioner’s removal as stockholder, director, chairman and CEO of Tiger Resort Leisure and Entertainment, Inc. (TRLEI) in 2017.”

But while Okada may have won a temporary victory in the Philippines, the Supreme Court in Japan, as far back as 2020, had affirmed the removal of Kazuo Okada from OHL and UEC, after upholding the trust agreement between Tomohiro Okada and Hiromi Okada, the son and daughter, respectively, of Kazuo.

The trust agreement, valid for 30 years and signed in 2017, transferred to Tomohiro the control of Hiromi’s share of 9.78 percent of OHL shares to her brother and which made Tomohiro, at 53.27 percent, the majority owner of OHL over his father’s 46.38 percent.

It was this majority share of Tomohiro that he used to oust his father from OHL on the issue of financial misdeeds.

A picture of Tomohiro Okada sourced from the Internet. In a statement last July 27, 2022, Tomohiro called on his father and his “cohorts” to “stop the perversion” of the SQAO issued by the Philippine Supreme Court.

While father and daughter subsequently reconciled and asked the Tokyo District Court to nullify the trust agreement, this was rejected in 2019, with the Japan Supreme Court upholding the ruling the following year.

With the sibling’s trust agreement valid for the next 30 years—unless Tomohiro too had a change of mind—Kazuo is barred from rejoining the OHL board (its subsidiary corporations, TRAL, UEC and TRLEI) also for the next 3 decades (see related article here).

In a statement last July 27, 2022 carried by industry news sites, Tomohiro called on his father and his representatives in Okada Manila to “immediately vacate Okada Manila and stop their perversion of the temporary relief that the Philippine Supreme Court issued in April (2022).”

“As the majority controlling shareholder in OHL, I, Tomohiro Okada, condemn and disown the acts of my father Kazuo and his Filipino and Japanese cohorts in Okada Manila.

“Their perversion of the law must be put to an end. I am organizing the boards of OHL, UEC, and TRAL to immediately address this issue, work with our legal teams, and seek redress from the High Court of the Philippines to put to rest the Kazuo group’s futile attempt at what is truly a shameful corporate heist,” Tomohiro said, adding:

“I do not recognize the illegitimate occupation of Okada Manila or any of their claims that they now manage and control Okada Manila. I only recognize the legitimate board of TRLEI led by Byron Yip, who was duly elected by shareholders, to run Okada Manila.

“My father’s minority voting stakes in OHL does not give him the right to control Okada Manila — much less appoint anyone as part of its board.”

Elamparo expressed confidence that with all the facts and events that have transpired since Okada’s removal in 2017 that are all in favor of OHL/TRAL/TRLEI, the Philippine Supreme Court would soon rescind its SQAO and thus assured the investment community that the rule of law is functioning in the country.