May 1, 2014 / 5:14 AM / 5 years ago

Okada files criminal complaint against Wynn in Japan

TOKYO (Reuters) - Universal Entertainment Corp (6425.T) and its billionaire founder Kazuo Okada have filed a criminal complaint against Wynn Resorts Ltd (WYNN.O) and its CEO Steve Wynn in Japan on allegations of defamation.

Universal Entertainment Corporation CEO Kazuo Okada poses during an interview in Hong Kong October 30, 2012. REUTERS/Bobby Yip

The complaint marks the latest salvo in a long-running feud between the two former business partners.

Universal said in a statement on Wednesday that it submitted the complaint with the Tokyo District Public Prosecutors Office on April 24, accusing the U.S. casino operator and its CEO of “defamation, harm to public trust and circulation of rumors” in relation to the publication of an investigation into Universal’s conduct in the Philippines.

The investigation was commissioned by Wynn and made public in early 2012.

In an emailed statement, Wynn said the criminal complaint was an attempt by Okada “to create a distraction from the investigations pending against him”.

Wynn said the complaint was related to a previously filed civil defamation case that a Tokyo court, ruling it should not be tried in Japan, dismissed last year. Universal is appealing that ruling.

Universal filed the civil defamation case after Wynn published its investigation into Okada in February 2012, alleging his company improperly offered gifts and entertainment to gaming officials in South Korea and the Philippines.

Universal has acknowledged spending a total of $110,000 over three years on such outlays, but maintains they did not constitute a violation of U.S. anti-bribery laws.

Following the investigation, Wynn said Okada was unsuitable as a director of Wynn Resorts and redeemed Okada’s 20 percent stake in Wynn Resorts at a discount.

The battle between the former partners has been playing out in courts in the United States, Japan and the Philippines for more than two years.

While Universal said in its statement that Tokyo prosecutors had accepted the complaint, it was unclear whether that would translate into an official investigation.

To date nothing has come of a similar criminal complaint filed by Okada against Wynn in the Philippines in December 2012.

The tussle between Okada and Wynn reaches a critical juncture in the coming days, when a six-month stay on discovery in their U.S. civil proceedings ends.

A “status check” hearing before Clark County District Judge Elizabeth Gonzales is scheduled for May 8, according to the court’s website.

Gonzales had put the civil proceedings on hold to allow U.S. prosecutors to continue investigating Okada and his companies for possible bribery in the Philippines.

That criminal investigation centers on $40 million in payments made by Universal affiliates to a politically connected consultant in 2010.

The payments were made around the same time Universal was lobbying for concessions for a casino it is developing on Manila Bay.

Universal and Okada, who founded and controls the Japanese pachinko gaming machine maker, have denied any wrongdoing.

The Philippine government has said it was investigating the payments. The Nevada Gaming Control Board, the Las Vegas gaming regulator, is also probing the payments, according to people with knowledge of the matter.

Universal has filed a defamation suit against Reuters in Tokyo for its reporting on the $40 million in payments. A Reuters spokesman said the company stands by its reporting.

Reporting by Nathan Layne in TOKYO; Additional reporting by Farah Master in HONG KONG; Editing by David Holmes and Ryan Woo

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