Friday’s Reuters report of a paper trail linking millions of dollars in payments from companies controlled by Universal Entertainment chairman Kazuo Okada and a former consultant to the Philippine Amusement and Gaming Corporation (PAGCOR) has resulted in the biggest plunge in Universal shares in nearly a year. At the time of this writing, the pachinko giant’s stock is down over 10.5% to ¥1,506, it’s lowest value since February, when Wynn Resorts accused Okada of improper dealings with PAGCOR officials and forcibly redeemed his 20% stake in the company at 30% below market value.
Okada’s ordeal is only just beginning. On Sunday, PAGCOR told Rappler.com that it was investigating the information contained in the Reuters report, which claimed Rodolfo ‘Boysee’ Soriano, a confidante of former PAGCOR boss Efraim Genuino, received $5m via Aruze USA – Universal’s Nevada-registered US subsidiary – in early 2010. This was the same period in which Universal was lobbying hard for (and eventually received) exemptions related to its Entertainment City casino project in Manila. Aruze transferred an additional $35m to a company of undetermined ownership around this same period. In August, around the time Nevada gaming regulators began an audit of Aruze’s Japanese accounts, Universal sued several former employees for making unauthorized money transfers. On Monday, Universal spokesman Nobuyuki Horiuchi said the company was checking Reuters’ claims against its own records.
PAGCOR lawyer Jay Santiago told Rappler the state-controlled gaming regulator/operator was “looking into these serious allegations” and that it would refer the matter to the Justice Department and the National Bureau of Investigations. Santiago also said PAGCOR “welcomes the new allegation of corruption unearthed by US investigators against officials of the gaming agency under the previous PAGCOR management. It will help PAGCOR to further strengthen its plunder case against Mr. Soriano which we filed last 2011.”
It’s been a rollercoaster week for Okada. On Thursday, just two days after a Nevada judge affirmed Okada’s right to challenge Wynn’s forcible redemption in court, one of the US law firms representing Okada quietly withdrew from the fray. The Las Vegas Review-Journal reported that the firm of Davis, Polk, Wardwell LLP failed to cite a reason for backing away from the case in its filing in Clark County District Court. Might they have received an advance copy of Reuters’ article?