Heading toward a court showdown, Japanese billionaire Kazuo Okada today released a letter to Wynn Resorts Ltd. shareholders criticizing Chairman and CEO Steve Wynn.
The Wynn board of directors has canceled Okada’s $2.9 billion stock position and replaced it at a 30 percent discount with a $1.9 billion note. The board acted this year because of concerns Okada had improperly tried to influence Filipino gaming regulators as he worked to develop a casino resort in the Philippines.
Okada denies wrongdoing and has questioned Wynn Resorts’ pledge to donate $135 million to a university in Macau, where it has big gaming resorts. The U.S. Securities and Exchange Commission has been looking into the donation.
In a court filing last week, Wynn Resorts directors denied there was anything improper with the donation and specifically said it was not aimed at buying influence to help the company with its Macau expansion goals.
“Directors cannot be found to have breached their fiduciary duties by making a business decision they believed to be lawful and beneficial to the company simply because that conduct resulted in governmental investigations,” the directors’ attorneys wrote in a motion asking that a group of shareholder suits against the board be dismissed. The shareholder suits were filed this year as the dispute with Okada unfolded.
Okada has asked a Las Vegas judge to reinstate his position as Wynn Resorts’ largest shareholder. That way he can nominate at least two independent directors for consideration at the November annual meeting. He says the independent board members would better look after the interests of shareholders and wouldn’t be beholden to Steve Wynn. An Oct. 2 hearing is set on the request.
“In the last year, the value of Wynn Resorts common stock has plummeted by almost 30 percent,” Okada said in today’s open letter to shareholders. “We believe that current and potential investors in the company have lost confidence in the company’s management and the board. We further believe that this loss of confidence has resulted from a history of poor corporate governance and questionable actions under the direction of Stephen Wynn, chairman of the board and chief executive officer of the company, much of it driven by Mr. Wynn’s personal financial and control goals.”
A request for comment was placed with Wynn Resorts.
Wynn Resorts separately last week disclosed that John Moran, a board member since 2002, is retiring from the board and won’t stand for re-election during the Nov. 2 annual meeting.
“There are no disagreements between Mr. Moran and the company that caused or contributed to his decision,” the Wynn filing said of Moran, the retired chairman of Dyson-Kissner-Moran Corp., a New York conglomerate with companies in manufacturing, retailing, distribution, financial services and real estate development.